Revealing Information About Board-designated Net Assets

As we begin another year, it is always a good idea to take such time to look at the events that shaped our industry over the past year, and to look ahead at what the new year may bring.

So what does this mean for you? If you’re a public U.S. company and you have not already started planning for a potential IFRS adoption, now might be the time to do so. If you are not a public U.S. company, it is still a good time to anticipate how the SEC’s decision will affect you.

Anticipated timing of future rule-making by the SEC – on the basis of the progress of milestones 1 – 4 and the experience acquired from milestone 5, the SEC will determine in 2011 whether to require mandatory adoption of IFRSs for all US issuers. If so, the SEC will determine the timing and approach for a mandatory transition to IFRSs. Potentially, the option to use IFRSs when filing could also be expanded to other issuers before 2014.

A Parade Of Board-designated Net Assets Information

Performance plans aren’t a new conception. They have been around in the U.S. since the 70s, and they gained popularity in the U.K. and Europe in the 90s. But now, in a post-recession era of public scrutiny over executive compensation, we’re seeing the idea gain increasing popularity in North America. The concept of performance plans is great in theory: compensate people depending on their individual performance. But effective and successful performance plans are challenging to formulate and implement, in no small part because they require companies to be in a position to quantitatively measure performance and there’s no straightforward and simple way to do this.

So while the industry builds momentum and information in this regard, we will of course be hearing more about performance plans in 2011. Download a Solium-sponsored report on performance plans, published in association with the Certified Equity Professional Institute.

At a time when financial literacy levels are dangerously low and people are in danger of not having sufficient retirement savings, it has become more critical than ever for employers to provide financial education to their employees. Many people would even argue that it is a company’s corporate responsibility to offer this form of education, to substantiate their equity plans and lessen the burden on government support systems.

But mandated or not, there are undeniable benefits to educating your plan participants about their equity plans and retirement strategies. Not only does it promote financially informed and independent employees, it also promotes a healthier work environment.

For shares acquired under a stock compensation program, the cost basis also includes any income reported on the employee’s Form W-2, in connection with either the acquisition or the sale of the shares.