Share Based Payment (SBP) report with Ratable expensing method

This support article explains the SBP report with a ratable expensing method.

The ratable expensing method is used when reporting in line with IFRS (International Financal Reporting Standards) or GAAP (Generally Accepted Accounting Principals).

Please note that the report highlighted in this article has a period type is month and it is simple deflation of 1% (highlighted in the screenshot below).

Before you can export the report, you will need to add Fair Value and Share Price valuations. You can read more about it here.

Once the report has been ordered, click ‘Download’ (green button) to download the SBP report in an Excel spreadsheet.

Screenshot 2020-08-17 at 06.59.32Once you have downloaded and opened the report, you will see 8 worksheets:

  1. Description
  2. Warning
  3. Expected Future Values
  4. Price Estimates
  5. Grant Details
  6. Data - grants per period
  7. Data - tranches
  8. Data - transactions

Worksheets 5 - 8 stores the data and details of the grants and worksheets 3 - 4 uses those worksheets to calculate the relevant values.


1. Description: 


This is where you can find details of the report as well as the parameters that you have selected for the report i.e amortization method, deflation type and percentage etc.

Screenshot 2020-08-17 at 07.01.24


2. Warning
:


This states all of the information that is missing and that is needed in order to successfully submit the report. These warnings could include:

  • Missing Fair Value
  • Missing Share Price estimate
  • Missing vesting description for option grants
  • Missing terms and conditions for each option grants
  • Missing terms and conditions for the option plans

Next to each individual warning description, there will be the corresponding link that will direct you to Capdesk and allow you to make the necessary adjustments. You are still able to review the report with these warnings but the relevant parties will require the additional information.

Screenshot 2020-08-16 at 22.14.40

 

3. Expected Future Values:


This worksheet details the expected future value of each grant specific to each tranche. To calculate this, we sum up amount of options that have vested in that period * deflation * fair value of the tranche. 

When using a Ratable expensing method, the expected future value is only added to the period that the tranche vests.

These are the fields found in the worksheet:

Grant ID - The grants’ unique identifier, if a grant has multiple transactions, each transaction will share the same ID.

Plan Name - Every grant recorded belongs to a plan and is subject to its terms and conditions (EMI, Unapproved, etc.).

Grantholder Name - The name of the optionholder.

Grant Date - The date of grant.


Vesting Start - The date of when the vesting schedule commences.

Total Granted - The total amount of options granted to the optionholder.

Deflation -  The expected number of people leaving your company (set by the administrator when ordering the report).

Thereafter, we see the expected future values that are calculated by the predetermined period and expensing method. The right side and the bottom of the page also shows the totals of these.

Screenshot 2020-08-16 at 22.13.28

 

4. Price Estimates:


In this worksheet, data is mostly taken from worksheet ‘data - grants per period’. This is because the worksheet lists the transaction details of each grant per period. The Price Estimate worksheet then sums that up for each period to calculate the grants periodic price estimate.

These are the fields found in the worksheet:

Period - This is dependent on the period interval set in the parameter of the report and the date of the transaction e.g if the period was ‘Monthly’ and an issuance occurred on 10/08/2020, the period would relate to that month and be denoted by 202008.

Outstanding Start of Period - The outstanding options at the start of the period  (Total Granted - (Exercised + Cancelled + Expired)).

Outstanding - WAEP - The weighted average exercise price (WAEP) of the outstanding options at the start of the period.

Issued in Period - All options granted in the company in a certain period.

Issued WAEP - The weighted average exercise price of the issued options of that period.

Issued WAFV - The weighted average fair value (WAFV) of the issued options of that period.

Exercised in Period - All options exercised in the company in the period.

Exercised WAEP - The weighted average exercise price of the exercised options of that period.

Exercised WASP - The weighted average share price (WASP) of the exercised options of that period.

Cancelled in Period - The amount of options cancelled in a certain period.

Cancelled WAEP - The weighted average exercise price of the cancelled options of that period.

Expired in Period - The amount of options expired in a certain period.

Expired WAEP - The weighted average exercise price of the expired options of that period.

Outstanding End of Period - The outstanding options at the end of the period  (Total Granted - (Exercised + Cancelled + Expired)).

Outstanding WAEP - The weighted average exercise price of the outstanding options at the end of that period.

Exercisable - The number of vested, non-cancelled, non-exercised options.

Exercisable WAEP - The weighted average exercise price of the exercisable options of that period.

Exercise Prices - The price that the grantholder would pay to exercise 1 vested option. If there are multiple grants recorded in this row, there will be multiple exercise prices.

Minimum/Maximum Exercise Price -  The maximum/minimum exercise price of each grant detailed in that period. If only one grant is detailed, these values will be the same.

Contractual life - The weighted average remaining contractual life. This is calculated by: (the sum of the remaining contractual life * the options granted for all grants)/the sum of the options granted for all grants.

Screenshot 2020-08-16 at 22.18.56Screenshot 2020-08-16 at 22.19.27


5. Grant Details:


This worksheet highlights details of the grants and corresponding valuations to be in line with IFRS. This is the same information that can be found in Capdesk’s user-interface. 


Grant ID - The grants unique identifier, if a grant has multiple transactions, each transaction will share the same ID.

Plan Name - Every grant recorded belongs to a plan and is subject to its settings (EMI, Unapproved, etc.)

Grantholder Name - The name of the optionholder.

Grant Date - The date of grant.

Expiry Date - The date that the options expire.

Deflation -  The expected number of people leaving your company (set by the administrator when ordering the report).

Exercise Price - The price that the grantholder would pay to exercise 1 vested option.

Fair Value - The grant’s corresponding Fair Value generated by Capdesk.

Fair Value Currency - The currency of the Fair Value.

Share Price Estimate - The grant’s corresponding Share Price that is recorded on Capdesk.

Share Price Estimate Currency - The currency of the Share Price.

Settlement type - The type of settlement for the options. Currently Capdesk only supports Equity Settlement.

Fair Value Description - A description of the Black-Scholes Fair Value Estimate and its parameters.

Vesting Description - A description of the vesting schedule. If the grant has an automatic or immediate vesting schedule then Capdesk will populate this, if the schedule is custom or conditional then the administrator will have to populate the description via Capdesk. To do this, click the option grants corresponding action button (3 dots) -> modify vesting -> add the description -> save.

Plan Terms and Conditions - The terms and conditions of the corresponding plan which can be populated on Capdesk.

Grant Terms and Conditions - The terms and conditions of the corresponding option grant which can be populated on Capdesk.

Screenshot 2020-08-16 at 22.22.09Screenshot 2020-08-16 at 22.21.49


6. Data - grants per period
:


This worksheet highlights the transaction history of each grant detailed in each period.


Grant ID - The grants unique identifier, if a grant has multiple transactions, each transaction will share the same ID.

Total Granted - The total amount of options granted to the optionholder.

Period - This is dependent on the period interval set in the parameter of the report and the date of the transaction e.g if the period was ‘Monthly’ and an issuance occurred on 10/08/2020, the period would relate to that month and be denoted by 202008.

Outstanding Start of Period - The outstanding option quantity at the start of the period  (Total Granted - (Exercised + Cancelled + Expired)).

Issued in Period - How many options were granted to an optionholder in a certain period.

Exercised in Period - How many options were exercised by the grantholder in a certain period.

Cancelled in Period - How many of the grantholder's options were cancelled in a certain period.

Expired in Period - How many of the grantholder's options expired in a certain period.

Outstanding End of Period - The outstanding option quantity at the end of the period  (Total Granted - (Exercised + Cancelled + Expired)).

Exercisable - How many options have vested and are therefore exercisable at the time of the period.

Exercise Price - The price that the grantholder would pay to exercise 1 vested option.

Share Price Estimate - The estimated share price, this is only detailed in a period where the grantholder has exercised their options.

Fair Value - The fair value of options upon issuance.

Contractual Life - The time from the period ends until the contract expires.

Screenshot 2020-08-16 at 22.23.56Screenshot 2020-08-16 at 22.24.23



7. Data - tranches
:


This worksheet shows each vesting tranche represented by period and the grant ID.

Tranche ID - The tranches unique identifier.

Grant ID - The grants unique identifier, if a grant has multiple transactions, each transaction will share the same ID.

Period - This is dependent on the period interval set in the parameter of the report and the date of the transaction e.g if the period was ‘Monthly’ and an issuance occurred on 10/08/2020, the period would relate to that month and be denoted by 202008.

Date - The date the specified quantity of options vest.

Quantity - How many options vest in the tranche.

Future Value - The future value of the specified vested options.

Screenshot 2020-08-16 at 22.26.47


8. Data - transactions
:


This worksheet provides details about each grant transaction.

Grant ID - The grants unique identifier, if a grant has multiple transactions, each transaction will share the same ID.

Type - Either an issuance, exercise, cancellation or expiration.

Period - This is dependent on the period interval set in the parameter of the report and the date of the transaction e.g if the period was ‘Monthly’ and an issuance occurred on 10/08/2020, the period would relate to that month and be denoted by 202008.

Date - The date of the transaction.

Quantity - How many options were affected by the transaction.

Weighted Average Exercise Price - The cost of exercising the quantity (quantity * exercise price).

Weighted Average Share Price Estimate - Quantity * corresponding Share Price.

Weighted Average Fair Value - Quantity * corresponding Fair Value.

Screenshot 2020-08-16 at 22.30.06

The data above is used to generate the Expected Future Values sheet and the Price Estimate sheet.

 

If you need further assistance, you can reach out to us by submitting a support ticket here.