Custom Assumptions:
Tailoring Reports to Fit Your Values
Whether you are a long time client migrating to the latest version of ASC 718, or you just switched to Carta from another platform entirely, one big question is probably on your mind:
Why does my expense look different, and how can I match historical values?
It is not uncommon for the Carta tool to create an expense output that does not match a company's offline bookkeeping. This can cause alarm when a company has already locked and audited expenses for prior years, but fear not! It is something that can be fixed.
The difference in output is driven by a variety of factors, including different methods in calculating awards (i.e. Black-Scholes as opposed to Monte Carlo), misalignment in data integration, custom volatilities, and more. Most often, however, the fair value for awards has changed and is causing a difference in overall stock comp expense.
To answer these concerns, the engineers at Carta created a user-facing capability to tweak the Black-Scholes inputs. Clients can use either our Custom Assumptions Importer or In-App Assumptions tool to modify specific awards, or entire groups of awards, so that historical values can be matched in the system. This means that you are able to further customize your settings, and move forward with confidence in future reports.
Sometimes the custom assumptions importer can cause confusion, and that's alright. Our team of analysts are always happy to jump on a video conference and walk you through all the minute details involved in this process.
For more information and updates on using custom assumptions at Carta, e-mail us at 718@carta.com
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Shevaun Cash
Financial Reporting Analyst
Carta
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