Stock Administration System Changes
& Financial Reporting Reconciliation

Changes to a stock administration system can cause broad, fundamental ripple effects in the downstream financial reports.

Typically, there are material differences in underlying accounting methodologies and how calculations are performed. Reporting tools also differ in their data requirements. This is especially so when the data fields are used exclusively for financial reporting or their use differs in reporting (e.g., modification information, valuations, accelerations, or performance payouts). Finally, the new system’s reports will have idiosyncrasies in how information is presented—such as tranche-level detail, modifications, and multi-metric performance vehicles—all of which will require adjustment.

To get comfortable with all the differences, a custom process is needed to compare one system with another. Given the amount of data involved, the various areas of financial reporting that stock-based compensation affects, and the potential for multiple interactions to complete the reconciliation, this work can be extremely tedious and time-consuming to carry out manually.

We’ve helped many companies with these challenging reconciliations. As a result, we’ve developed a way to transition between stock administration systems so that all proceeds smoothly and without disruption to the financial reporting process.

How We Help

We can help you:

  • Understand methodology differences between financial reporting systems
  • Determine the correct accounting treatment for complex situations such as hybrid market-performance awards and modifications
  • Convert reports into comparable content and format—both the underlying stock compensation data and the financial reports generated by different reporting tools
  • Identify differences in each relevant input and output variable
  • Compare and reconcile reports from multiple systems at the grant or tranche level
  • Analyze drivers of variance in each financial reporting area (expense, tax, EPS, disclosure, etc.)
  • Develop solutions to address any discrepancies found during the reconciliation
  • Book any required changes in estimate
  • Build an automated process, tailored to your data warehouses and reporting platforms, that brings efficiency and repeatability to reconciliations