I can't imagine that something like this would EVER get implemented 'formally' into GC. So much complexity with how employers deal with stock option awards, vesting periods, black-scholes methods, different countries' accounting rules. The fact that someone asked once in 2001 and someone else in 2007 probably gives you info to not hold your breath.
Having said that, if I ran my employer's books in GC and awarded stock options, I would certainly account for them, and would have no problem doing so in GC if I understood the accounting. So the accounting. My understanding (in the USA) is employers calculate at award the 'fair market value' of the options awarded and *expense *that amount *over the vesting period* of the options awarded. There is then additional complexity to entries made if/when options are exercised by employees or if they expire worthless. My understanding is there is a fair amount of complexity here. Do you understand this complexity? If so, you should be able to implement in GC. If you don't then you need complex accounting advice, which you are very unlikely to get here, nor want to get here. As for the gnucash part, if my company awarded stock options to various employees and we calculated, using a Black Scholes model, a fair market value of $100,000 at the time of the awards, and the awards would vest in 5 years, then I would make annual entries Debit Expense:Stock Option Expense Credit Equity:Paid-in Capital -- Equity compensation awards I'd make each entry of $20k debit expense, and $20k credit equity for each of 2025, 2026, 2027, 2028, and 2029, if the awards were made right now in January 2025. Those would be all the entries you'd need to make from GRANTING the stock options. Of course you would have additional GC entries to make upon any of the following events: - an employee leaves and forfeits his/her share of the initial award, prior to vesting - ALL the options expire worthless at some future point - some/all of the options are exercised by employees Figure out the accounting for each of the 3; then the GC entries are fairly straighforward. (Note under US GAAP, as I understand it, the compensation expense is taken once and not adjusted as the stock price changes. And only reversed if an employee forfeits pre-vesting. But I'm not an accountant and you should check the actual GAAP rules carefully.) On Sat, Jan 4, 2025 at 4:29 AM - <dfran...@gmail.com> wrote: > I mean options granted to employees (usually not tradable), not calls and > puts. > > https://bugs.gnucash.org/show_bug.cgi?id=313663 is an enhancement request > for this, filed in 2005. > > https://bugs.gnucash.org/show_bug.cgi?id=799420 has some discussion about > this, because the QIF importer broke due to options grants. > > In 799420, Patrick suggests putting a message out on a mailing list to get > thoughts on how to implement employee stock options, so here I am. > > Thoughts? > > === > > Prior references: > > > https://lists.gnucash.org/wiki/FAQ#Q:_How_do_I_enter_ISOs_.28Incentive_Stock_Options.29_that_I_exercised_for_a_nonpublic_company.2C_which_are_valuable_only_on_paper.3F > says basically: "don't track them until you exercise them; once you > exercise them, just enter the stock". So, that does not handle grant, > vest, or expire. > > https://www.google.com/search?q=site%3Alists.gnucash.org+stock+options > shows some posts relevant to stock options grants on the mailing lists: > > - https://lists.gnucash.org/pipermail/gnucash-user/2001-June/001405.html > - https://lists.gnucash.org/pipermail/gnucash-user/2007-May/020514.html > - > https://lists.gnucash.org/pipermail/gnucash-user/2011-September/041116.html > > (There are a couple of other posts that appear to be about calls and puts.) > > A couple of the relevant threads have proposals about how to do this given > current gnucash functionality. To really track options, I think you'd need > new functionality, since they are not like stocks. > > === > > The short version of how stock options work in the U.S.: > > - You are granted stock options that are likely not vested, with a "strike > price", the price of the stock at the moment of the grant. > - Over time they vest, e.g., monthly. > - With vested options, you own the option to buy a stock, but you don't own > the stock. > - You can exercise vested options, in which case you buy the stock at the > strike price. > - If you don't exercise the option, it can expire, in which case you don't > own it anymore. > > This behavior does not depend on where you live in the U.S. > > Tax behavior of options is very complicated. I don't think gnucash should > try to model it, especially as a first stab. > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
