I am working for a company that has recently gone public. Now I see a monthly accumulation of options vesting every month. I would like to account for these options as compensation in my accounts.

What is the mechanism to go about doing this? Do I have something like an Assets::Investments::EmployerOptions account that that I credit every month similar to my salary? What do I credit it with? I'm paid in EUR but my options are in USD. Do I just add the EUR conversion of the equivalent stock price at that moment in time (subtracting the strike price)?

Example: On Jan 1st 2019 I vest 100 options with a strike price of 10USD. The current market value is 20USD. So at this moment in time this is worth an unrealised $1000USD.

| Assets | Income | |--------|---------| | | +$1000 | | +$1000 | | |--------|---------|

Or is all this moot and it should only count the number of shares and only do accounting when I exercise and sell?

note I am a Canadian citizen living and employed in Germany. I've never been a resident in the USA (just done work assignments theres).

  • 2
    I would advise you do not account for them until they are turned into cash. They could quite suddenly be worth zero. – Pete B. Jan 7 '19 at 20:13
  • @PeteB. From a tax standpoint (at least in the US) it would be good to account for them as income when they vest since that's what the taxable income and cost basis will be. – D Stanley Jan 7 '19 at 20:27
  • @DStanley good point. I'll update my question with citizenship and residency context. – Scott Muc Jan 7 '19 at 20:28
  • @PeteB. I agree that would be simplest. Just wondering if there are any models for accounting these things. – Scott Muc Jan 7 '19 at 20:45

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