Tax Reporting for Equity Compensation

Tax accounting for share-based compensation becomes notoriously complicated as soon as you get into multiple granting jurisdictions or equity award types. It’s not just the basic deferred tax framework of ASC 740 that creates complexity, but also attendant issues such as employee mobility, an evolving tax and regulatory environment, and vast amounts of equity award data. Now, with the elimination of the APIC pool and therefore heightened P&L volatility from tax accounting, organizations of all sizes are under renewed urgency to automate and enhance their tax reporting procedures.


As part of our Financial Reporting service, Equity Methods supports all aspects of tax reporting for share-based payment awards. We carry out the following:

  • Streamline and automate deferred tax reporting processes (upfront DTA recording and downstream unwinding)
  • Incorporate the effects of employee mobility into deferred tax reporting
  • Manage multiple and frequently-changing tax rates across different international jurisdictions
  • Support 162(m), NOL situations, DTA build-up for assumed awards in an acquisition, and state taxation
  • Analyze standalone APIC pool or DTA balance verification
  • Run quarterly or semiannual forecasts to determine the effects of stock price volatility and tax rate changes on the income statement
  • Develop historical backtests to show how financials would have looked without an APIC pool or how elimination of the APIC pool could affect the P&L
  • Establish IFRS deferred tax tracking and related mark-to-market procedures
  • Provide DTA balance sheet proof reports

Reduce complexity and audit risk with a global tax reporting framework for your equity compensation plan.

Contact Us About Outsourced Tax Reporting for Equity Compensaton