International Tax Journal

Accounting Requirements for Employee Stock Options – Share Based Payments to Employees


CA Himanshu Chapsey
Since the time of the Industrial Revolution advancements in science and technology have resulted in creation of new goods and services available to man and the organization and structure of business enterprises has also required changes. From the small single owner or partnership structures of the pre Industrial era, the era of large scale manufacturing brought in the assembly line with its factories, management structures and the birth of corporations where capital was raised from investors via listing on stock exchanges. In the intellectual age of recent times technology has taken centerstage with the size of enterprises reducing (technology entities require few employees but generate outsize returns). The business models of these companies often involve years of losses (eg Spotify the music app has a valuation of hundreds of millions of dollars but yet to turn a profit). Compensation structures have also evolved with stock market valuations increasing sig.......