[GNC] Company plan for stocks and stock options

[Murugan Muruganandam]

Employee stock options are normally not taxed until the vesting is done.  Restricted Stock Units (RSU) has a different mechanism though

What is your objective of this accounting? if you can detail then there are couple of ways to account for the same




Saludos Cordiales


Murugan

________________________________
From: gnucash-user <gnucash-user-bounces+m.muruganandam=hotmail.com at gnucash.org> on behalf of Stan Brown <the_stan_brown at fastmail.fm>
Sent: Tuesday, April 4, 2023 2:06 PM
To: gnucash-user at gnucash.org <gnucash-user at gnucash.org>
Subject: Re: [GNC] Company plan for stocks and stock options


On 2023-04-04 10:40, Wolfgang Paul Rauchholz wrote:
>  Fairly new to gnucash and not a finance export, I want to run all my
> personal finances with this great tool.
>
> I installed 5.0 by compiling it under fedora core 37.
>
> I started adding normal daily expenses and all look fine.
>
> One of the doubts I have is how do I correctly add a company plan for stock
> options and stock plan that get vested/distributed every year. As I don't
> buy them there is no cash leaving my bank account.

The options and stocks are part of your compensation as an employee,
right? As such, the accounting would be similar to your accounting for
your paycheck.

Your paycheck (ignoring tax withholding) is
    Debit: Cash or Bank account
    Credit: Employee income

The stocks would be
    Debit: Stock in Company X
    Credit: Employee income
and similarly for the options. With stocks and options you'll want to
know number of shares and share prices so that you can compute gains and
losses when you sell them. If they aren't fully vested you will want to
note the vesting date as well.

You'll probably want to have separate accounts for stocks in the company
and stock options. To simplify computing your income tax, you may want
to have separate income accounts for income in money and income in
securities; they could both be subaccounts under an Employee Income account.

The usual disclaimer: I don't know your tax situation or any legal
requirements for how you may need to account for all of this.

Stan Brown
Tehachapi, CA, USA
https://BrownMath.com
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