Tax Settlement Forecasting – The Next Big Thing in Stock-based Compensation Accounting

Like it or not, corporate finance and tax teams are now on the hook for forecasting excess tax benefits from stock-based compensation. FASB’s amendments to ASC 718 in ASU 2016-09 eliminate the APIC pool, which up until now, has buffered the income statement from volatility.

To help you prepare, here’s a refresher on the current deferred tax model, along with perspectives on the different ways a tax settlement forecasting process can be designed.