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airQuant provides a simple and cost effective service for the standard valuation of share options granted by companies to employees (share-based payments).

airQuant provides an Option Valuation service to companies to help meet their reporting requirements.

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What we do

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Share-Based Payments

When a company pays for goods and services, it records the expenditure in its accounts.  Sometimes, payments are made in terms of the company’s own securities - i.e. shares and/or options. These are referred to as share-based payments and are also expenses which the company records in the accounts.

To do this, the securities need to be valued.  This is a simple matter where the securities are listed and freely marketable and the going market price is easily established.  However, where the securities are not listed and a market does not exist, the issue of valuation is more complex.

In the case of options, there are several widely accepted models upon which to base a valuation.  These require a variety of assumptions and empirically determined parameters as inputs to the determination of value.

Where options vest over time, their value is booked progressively over time to reflect the progressive transfer of ownership to the payee (amortised).  Where the eventual amount vested is less that the original expected amount (due to failure to meet all vesting conditions), then some adjustment may be necessary to reflect the reduced vesting in the subsequent period.

However, once vested and accounted for, the expensing of the transaction is complete.  Should options eventually become worthless and lapse or increase in value after vesting, there is no impact on the company’s accounts.

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Valuations

Provide us with your contact details and information describing the options to be valued. We will then provide you with a quote for the valuation.

The following details required for each set of options:

  • Name of option (for identification)
  • Are underlying shares listed?
  • Last price of underlying shares preceding valuation date
  • Date granted (valuation or measure date)
  • Date for exercise
  • Exercise price.

The valuation will be presented in a report (pdf format) containing the relevant inputs and derived option value. This report is sent to you via email.

Request a quote by email.

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