A New Way to Estimate Volatility
VWAP Volatility. Developing volatility assumptions is a common practice in the financial community, where many sophisticated techniques have been developed that go beyond simply calculating volatilities based on historical stock prices. The Black-Scholes, Monte Carlo, and lattice models all use a volatility input, which may come from a variety of sources. For example, the use…
Is VWAP Volatility a Better Method for Me?
VWAP Volatility Infinite Equity is introducing new innovative thought leadership on the development of historical volatility for purposes of ASC718. We introduced the financial theory in the Research Brief, A New Way to Estimate Volatility, and published collectively at www.VWAPVolatility.com. The intent of this article is to help the reader understand historical volatility and the…
The New AS 1210: Using the Work of a Specialist
The valuation and accounting for employee equity under ASC 718 can be quite material and has ramifications throughout your corporate financials. Some of the exhibits that will be affected are the income statement, the disclosures in your Summary Compensation Table in the Proxy, the effect on your annual say on pay votes, and other investor…
The Valuation of Non-Vesting Conditions under IFRS 2
If a plan allows for retirement-eligible award holders to continue to earn their awards after retirement, what initially looks like a performance condition could actually be a “non-vesting” condition under IFRS 2. Non-vesting conditions should be considered in the estimation of fair value and could drastically lower your company’s expense.
Retirement Eligible Employees and “Implicit” Holding Periods
Employees with equity awards are often vested (for accounting purposes) as soon as they become retirement eligible. If delivery of the awards occurs after the retirement eligibility date, there is an implied holding period and the fair value of the awards should be discounted. Make sure to take advantage!