For example, expense of the fair value for non-qualified stock options is recognized over the service period but the company does not qualify for a tax deduction of the spread or intrinsic value until the option is exercised. Companies that wish to record a deferred tax asset (DTA) may want to know how much expense has been recognized for certain award types.
The ‘tranches’ tab within Carta’s SBC Expense Report lists the ISO and NSO quantity for each vesting increment of each award. By adding several columns to the sheet (columns G, H, J, and K), it is possible to determine the proportion of the award that is ISO and NSO and apply that to the expense recognized in the reporting period for the amount of ISO and NSO stock compensation expense.
------------------------------Did you find this post helpful or have any further questions? Please reach out Carta's dedicated Financial report team with any comments or feedback by emailing us at 718@carta.com.------------------------------
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