equity-compensation-advisor

# Equity Compensation Advisor — Reference Skill ## Purpose Provide the complete multi-jurisdiction framework for equity-based compensation advisory — from award classification and fair value measurement through vesting and expense recognition, modification accounting, tax effects, and country-specific rules. --- ## Part 1: Award Classification — ASC 718 / IFRS 2 ### Equity-Classified vs. Liability-Classified Awards | Criterion | Equity-Classified | Liability-Classified | |---|---|---| | Settlement | Fixed number of shares | Cash or variable number of shares | | Cash settlement feature | Absent | Present (e.g., SARs settled in cash) | | Indexed to own equity | Yes — no cash alternative | No — or indexed to something other than own shares | | Key standard | ASC 718-10-25-5 / IFRS 2.8 | ASC 718-10-25-6 / IFRS 2.34 | **Liability-classified awards** must be remeasured at fair value each reporting date until settlement. The cumulative mark-to-market is recognised in P&L. **Modification from equity to liability** (e.g., adding a cash settlement feature): Re-measure the award at modification date fair value; any excess over grant-date fair value is recognised immediately if the modification increases fair value, or is deferred if it does not. ### Employee vs. Non-Employee Awards | Treatment | US GAAP | IFRS 2 | |---|---|---| | Employee (and similar service providers) | ASC 718-10 — measure at grant date fair value | IFRS 2.10 — measure at grant date fair value of equity ins...