Audit-Ready ASC 718 Valuation Reports
409.AI helps startups prepare expert-reviewed grant-date fair value analysis for stock-based compensation expense under US GAAP, with documentation built for auditor review.
ASC 718 is the US GAAP accounting standard for share-based payments: it requires companies to measure stock options and other equity awards at grant-date fair value and recognize that amount as compensation expense over the vesting period.
At a glance
| Report | ASC 718 valuation report |
|---|---|
| Summary | Expert-reviewed ASC 718 valuation reports with grant-date fair value analysis to support stock-based compensation expense and audit requests. |
| Price | From $1,499 |
| Jurisdiction | United States |
What is included
- Company and option grant intake context
- Grant-date fair value analysis with documented model inputs
- Expected term, volatility, risk-free rate, and dividend yield support
- Documentation to support expense recognition and disclosure workflows
- Expert-reviewed final valuation report
Frequently asked questions
What is ASC 718?
ASC 718 is the US GAAP accounting standard for share-based payments. It requires companies to measure stock options and other equity awards at their grant-date fair value and recognize that amount as compensation expense over the vesting period.
When does my startup need ASC 718 reporting?
Typically when financial statements are audited or prepared under US GAAP, which often starts around the first institutional financing, investor diligence, or IPO preparation. Auditors will expect grant-level fair values and supporting documentation.
How is the fair value of a stock option calculated?
Most private companies use the Black-Scholes model, which combines the fair market value of the underlying stock, the exercise price, expected term, volatility, risk-free rate, and dividend yield. Awards with market conditions can require lattice or Monte Carlo approaches.
How does ASC 718 relate to a 409A valuation?
A 409A valuation establishes the fair market value of the common stock for tax purposes, and that value is a key input to the grant-date fair value used for ASC 718 expense. The two analyses are commonly prepared together.
Which inputs do auditors focus on?
Auditors typically test the underlying stock value, the expected term assumption, the volatility benchmark drawn from comparable public companies, and the risk-free rate, along with the grant records behind each award.
How is the expense recognized?
Grant-date fair value is recognized as expense over the requisite service period, commonly straight-line for standard vesting, with a company policy election for how forfeitures are handled.
Does ASC 718 cover RSUs and other awards?
Yes. ASC 718 applies to share-based awards broadly, including restricted stock and RSUs, where fair value is generally based on the value of the underlying shares at grant rather than an option pricing model.
Is this tax, legal, or accounting advice?
No. The valuation report organizes company-provided information into supporting documentation and should be reviewed with your auditors and qualified advisors.