51. Valuation of Employee Stock Options, Market Condition, and Performance Based Options

Track: 
Fair Value Measurements
Field of Study: 
Accounting
CPE Credit: 
1.5
Knowledge Level: 
Intermediate
Prerequisite: 
Basic knowledge of, or general experience in, forensic accounting, business valuation, or litigation

Wednesday, November 7, 2018
 
7:30AM-8:45AM

Introduction to valuation of employee stock compensation awards. Service, market, and performance conditions and their impact the fair value. Deeply out-of-the-money options. Size and leverage impact on the volatility. Introduction to Black-Scholes, binomial model, and Monte Carlo simulations.

Learning objectives:

  • List and explain the different types of options Identify the methodologies used to value options
  • Define the concept of "moneyness" and how it impacts the selection of the valuation methodology Identify significant assumptions used in the valuation of options
  • Recognize the ASC 718 and SAB 14 requirements for estimating the expected volatility for public companies Recognize the AICPA recommendations for estimating the expected volatility for privately-held companies


SESSION SPEAKER(S)

Principal - Transaction Services, Grant Thornton