Create an ASC718 report

Before you create an ASC718 report in Diligent Equity make sure that your option plan is up to date. This applies whether the report is new or based on a previous report.

You will need the following information readily available:

  • Current share fmv

  • Volatility rate

  • Forfeiture rate

  1. Go to Accounting on the left navigation bar and select Add Report.

    The Accounting wizard opens.

  2. Fill in the relevant details on each page. Select Next to move to the next page after you have entered information or selected your preferences.

    Information Settings Preferences or content
    Report Details Report name This must be a unique name. We recommend using the a consistent format for all reports that you create.
    Base cap table record Don't change this.
    Period

    Set to create a monthly, quarterly or yearly report.

    • New report from

    • Based on the previous ASC 718

    Use the New Report From option as your starting place.

    Enter in the relevant start date for the period that you selected.
    Additional Settings

    • Exclude warrants

    • Exclude fully vested grants

    Select both.
    Milestones

    By default, the status will be set to Pending.

    If Milestones or Performance based vesting criteria exist within your Option Plan, you can determine if the Milestone has been achieved or not.

    If the milestone has not been reached, or is yet to be achieved, you can leave the setting as Pending.
    Fair Market Values (FMV)

    • Use previous fair value

    • Compute straight line between previous and next fair value

    If a fair value is missing for a specific date, you can choose to have Diligent Equity use Previous Fair Value or Compute straight line between previous and next fair value.

    To accurately calculate the expenses for the options you have awarded, ensure that the Share fmv values are entered.
    Add new You can add new FMV entries to the grid and type in the new value and date.
    Volatility Use value Enter in your own volatility value.
    Use comparable public companies Use comparable values.
    Forfeiture Rate

    • Employees

    • Management

    		Leave these fields blank or enter in the relevant values.
    Calculation Methods   Select the preferred options to determine how Diligent Equity should calculate Expected Term and Expenses.

  3. Select Finish and Diligent Equity will generate your ASC718 Report.

Your report will appear in the Accounting tab in your navigation bar. You can edit or review as needed.