Some limited liability companies use “profits interest” awards to compensate employees, contractors, investors and others for future services. But reporting these equity awards can be complicated, depending on their terms and features. Typically, an award’s fair value is recorded as an income statement expense, and a liability is recognized on the balance sheet. Private companies are asking for practical expedients and additional guidance on acceptable valuation methods, audit techniques and disclosure requirements. We’re atop the latest developments and can help you report these arrangements with confidence.
