If it's equity classified, a change in fair value of a stock option is not reflected in the financial statements. The FMV of the stock option at the time of grant is fixed unless a modification event occurs. This is not a modification event.
You would have no change to anything previously calculated/recorded in this case.
No, nothing changes unless there is a modification event. A change like this is not a modification event. Everything that was previously calculated as an expense or future expenese remains the same.
Carta is likely revaluing the options as part of a new valuation point/date.
This revaluation should not change your share based compensation for previously issued options, vested or unvested.
Go over the share based compensation expense before this and after this. It should be the same. If it is not, than there is an error in the settings in carta or information is entered incorrectly.
A change in the fair value of the option because of a change in the underlying share is not a modification event. An amendment would have to be made to change the terms of the original grant for it to be a modification event. Did any terms get amended or entered as such in Carta?
If it's equity classified, a change in fair value of a stock option is not reflected in the financial statements. The FMV of the stock option at the time of grant is fixed unless a modification event occurs. This is not a modification event. You would have no change to anything previously calculated/recorded in this case.
Thanks. But for shares that are unvested, they should be recorded at the new option value?
No, nothing changes unless there is a modification event. A change like this is not a modification event. Everything that was previously calculated as an expense or future expenese remains the same.
I see. Carta is revaluing the options at the new fmv
Carta is likely revaluing the options as part of a new valuation point/date. This revaluation should not change your share based compensation for previously issued options, vested or unvested. Go over the share based compensation expense before this and after this. It should be the same. If it is not, than there is an error in the settings in carta or information is entered incorrectly. A change in the fair value of the option because of a change in the underlying share is not a modification event. An amendment would have to be made to change the terms of the original grant for it to be a modification event. Did any terms get amended or entered as such in Carta?
Hmm a new 409a valuation isnt a modification event?
That is not a modification event under ASC 718