ACCOUNTING STANDARDS
Primary Framework
Ind AS 102 · IFRS 2 · ASC 718
Valuation
Planning an ESOP, issuing options, or accounting for an existing scheme?
We support companies across the ESOP lifecycle - from initial structuring and grant-date valuation to accounting, reporting, and ongoing advisory.
Ind AS 102 / IFRS 2
Black-Scholes & Binomial Models
Quick Summary
ESOP Valuation at a Glance
Core principles, primary accounting frameworks, and valuation models governing share-based compensation.
METHODOLOGY
Valuation Models
Black-Scholes-Merton · Binomial/Lattice · Monte Carlo
MODEL INPUTS
Key Parameters
Share value, exercise price, expected volatility, option life, risk-free rate, dividend yield.
WHY IT MATTERS
The Cost Behind Every Option Grant
IMPORTANCE
Why is ESOP Valuation Important?
Companies use ESOPs to align employees with the growth of the business. Valuation helps determine the economic value of these awards and, where applicable, the fair value used for financial reporting.
Companies use ESOPs to align employees with the growth of the business. Valuation helps determine the economic value of these awards and, where applicable, the fair value used for financial reporting.
- Fair value measurement for financial reporting
- Better-informed ESOP design and grant decisions
- Reliable valuations for financial reporting and corporate transactions
APPLICABILITY
Who Needs ESOP Valuation?
Companies and other entities may require ESOP valuation at different stages - from designing and granting options to financial reporting, transactions and reviewing existing awards.
This can apply to listed and unlisted companies, start-ups, growth-stage businesses and group entities, depending on the nature of the awards and the applicable requirements.
- Listed & Unlisted Companies
- Start-ups & Growth-Stage Businesses
- Group Companies & Multinational Entities
GOVERNANCE & COMPLIANCE
Applicable Regulations
ESOPs are governed by the accounting framework applicable to the entity, together with relevant corporate, securities and tax regulations in the jurisdiction where the scheme operates.
For Indian entities, this may include Ind AS 102, SEBI regulations, the Companies Act, 2013, and applicable tax provisions, depending on the nature of the entity and the ESOP arrangement.
- Ind AS 102 / IFRS 2: Share-based payment accounting and fair value measurement
- Corporate & Securities Regulations: Requirements applicable to the entity and its ESOP scheme
- Tax Regulations: Relevant tax treatment of ESOPs and their exercise
OUR OFFERINGS
What Our ESOP Valuation Services Include
- ESOP Advisory & Structuring
Design the right plan before you grant.
Scheme structure, vesting terms, exercise provisions and dilution considerations.
- ESOP & Equity Award Valuation
Independent valuations at every stage.
Valuation of ESOPs, SARs, Phantom Stock, ESPPs, RSUs and PSUs using appropriate pricing models.
- Accounting & Reporting
From valuation to financial reporting.
Expense recognition, vesting, forfeitures and accounting disclosures under applicable standards.
- Tax & Transaction Support
Supporting the decisions that shape your ESOP.
Valuation support for tax matters, award modifications and corporate transactions.
What We Need & What Lands on Your Desk
Share the key details of your ESOP scheme. Our team handles the valuation, accounting implications and supporting deliverables.
INPUTS & PREREQUISITES
What We Need From You
We help shape the scheme, build the valuation and take care of the technical work.
Scheme Objectives
Why you are introducing or reviewing the plan - employee retention, incentives, fundraising, succession, or other business objectives.
Scheme Terms
Vesting, exercise, eligibility, option pool, performance conditions and other proposed or existing terms.
Company & Equity Details
Current share capital, shareholding pattern, securities issued, recent funding rounds or transactions, and any proposed changes in ownership.
Award Details
Existing or proposed grants, exercise price, grant dates, number of awards and employee/service information.
Financial & Market Information
Financial statements, forecasts and other market inputs required for assessing the underlying equity valuation.
DELIVERABLES & SIGN-OFF
What Will Be Delivered
The valuation report and supporting work prepared for your engagement.
Professional Sign-Off
Signed by a Fellow Actuary (IAI / IFoA) and/or IBBI Registered Valuer
ESOP Structure & Design Note
Recommendations on scheme structure, vesting and exercise terms, eligibility, option pool, dilution and other key plan features.
Equity Award Valuation Report
Independent fair-value assessment of ESOPs, SARs, Phantom Stock, ESPPs, RSUs and PSUs.
Accounting & Expense Schedules
Grant-date fair value, expense attribution, vesting and forfeiture treatment, future expense schedules and remeasurement of cash-settled awards.
Disclosures, Sensitivities & Audit Support
Accounting disclosures, valuation sensitivities, and supporting documentation for audit and financial reporting.
Common questions
Frequently Asked Questions
Clear answers to the accounting, valuation, tax and practical questions that arise when designing and managing an ESOP
Can’t find what you’re looking for?
Our advisory team replies within one business day.
Across India & the GCC
Countries we serve
Specialised actuarial and business valuation services across India and all six GCC member states, combining local requirements with international reporting standards. Our team is based in India, with on-the-ground support in the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman.
ESOP & EQUITY AWARD VALUATION
Schedule Your ESOP Consultation
Discuss your ESOP structure, valuation, accounting and reporting requirements with our team.
Talk to an Expert- Black-Scholes, Lattice & Monte Carlo Models
- Ind AS 102, IFRS 2 & ASC 718 Accounting
- Fair Value & Tax Valuation Support
- Vesting, Forfeiture & Key Assumption Analysis
- Independent Sign-Off & Audit Support