How to set up a US GAAP or IFRS scenario
To build a scenario, navigate to Compliance & Tax and click Get started under Financial reporting.
Next, Click the scenario dropdown and select New scenario.
Click Get started
Select the accounting standard (US GAAP or IFRS) and give the scenario a name. Then, click Next: Financial Reporting Values.
Add Financial Reporting Values (FRVs) or review and adjust existing FRVs.
Then, click Next: Public Peer Companies.
As of June 2023, Carta began delivering separate reports for 409A valuations and ASC 718 financial reporting purposes when appropriate, in order to support the accurate application of diverging tax regulatory guidelines (409A) and GAAP (ASC 718).
A critical piece of financial reporting is an accurate record of the value of common stock. This value is referred to as the Financial Reporting Value (FRV) within Carta. The FRV will be used by your company as the current value of the underlying stock to calculate stock-based compensation of expense for option grants and restricted shares. The Financial Reporting tool enables users to enter a series of FRVs to be used for expense purposes.
Carta-generated FRVs will be available on the 409A Valuations page located in the Compliance & Tax hub for users who have received separate reports, and additional interpolated values can be added as-needed for reporting purposes only. Companies are not required to report using FRV and can still elect to report using FMV if desired. Any value added to this section will only impact reporting and will have no impact on other areas of Carta, such as issuance of awards or taxes upon exercise.