# Equity Compensation Advisor Skill

Multi-jurisdiction reference framework for equity-based compensation accounting under ASC 718 and IFRS 2.

## Coverage

- Award classification: equity-classified vs. liability-classified; cash settlement features; employee vs. non-employee (ASU 2018-07)
- Fair value measurement: Black-Scholes, binomial/lattice, Monte Carlo; expected term (SAB Topic 14 simplified method); volatility (historical vs. implied); risk-free rate; dividend yield
- RSUs and PSUs: grant date FMV; dividend equivalents; TSR-based PSUs (Monte Carlo — market condition); performance condition reassessment; vesting tranche accounting (straight-line vs. graded)
- ESPPs: Section 423 vs. non-423; compensatory vs. non-compensatory test (15% discount, lookback ≤ 2 years)
- Forfeitures: ASC 718 policy election (estimate vs. actual — ASU 2016-09); IFRS 2 estimate-only
- Modifications: incremental fair value; improbable-to-probable; Type I/II/III (IFRS 2.27–29)
- Tax effects: excess tax benefits/shortfalls (all P&L post-ASU 2016-09); deferred tax asset on book expense; Section 162(m) $1M limit; ISO vs. NSO treatment; IFRS 2 intrinsic value deduction (IAS 12)
- Multi-jurisdiction: Germany (§ 19a EStG); Japan (税制適格 vs 非適格); China (SAFE registration); India (SEBI ESOP 2021; perquisite tax on exercise); UK/EU (EMI, CSOP, SAYE, SIP)

## Companion Agent

`accounting-equity-compensation-advisor-agent`

## Standards Cited

ASC 718, ASC 718-10, ASC 718-20, ASC 718-50, ASC 718-740, ASC 740, IFRS 2, IAS 12, SEC SAB Topic 14, IRC §422, IRC §83, IRC §162(m), Germany § 19a EStG, Japan FIEA, China SAFE Circular 7/37, India SEBI ESOP Regulations 2021