Adding stakeholder relationships

To calculate your stock based compensation we will need relationships for each stakeholder on or before the issue date of every award. When setting up your expenses you may get an error that you don't have issue date relationships for all awards.

What is this used for?

In stock based compensation expense accounting we use the stakeholders relationship to a company to determine whether the awards expense falls under topic ASC-718 (Employee awards) or ASC-505-50 (Non-employee awards).

Updating or adding stakeholder relationships

You can add or update your stakeholder relationships on the stakeholders page found under the menu "Stakeholders" > "All stakeholders".

You can update an individual stakeholder's relationship by choosing "Edit stakeholder properties" from the dropdown at the end of the row and adding a relationship as of the issue date or correcting the effective date of an existing relationship to be on or before the first issue date.

Bulk updating stakeholder relationships

You can update your stakeholder relationships in bulk using excel by choosing "Update properties" from the green "Manage" menu in the top right, downloading the template, and on the "Edit Relationships" tab of the workbook, adding any new relationships in column F, and the effective date in column G.

Note that historical relationships can be added using this spreadsheet. New relationships may be effective prior to existing relationships.

You can then import the template under the "Update properties" menu item.

Choosing the right relationship
Stakeholder relationship is used for stock compensation expense accounting to determine whether the awards expense falls under topic ASC-718 (Employee awards) or ASC-505-50 (Non-employee awards).

Employee relationships (ASC-718)
Employee, Ex-employee, Board Member, Executive, Officer, Founder, and International Employee.
Non-employee (ASC-505-50)
Investor, Consultant, Advisor.
If you’re uncertain of a stakeholders relationship, "employees" typically receive a W-2 while "non-employees" typically receive 1099's, with the exception of board members.
Was this article useful? Thanks for the feedback There was a problem submitting your feedback. Please try again later.