Reporting for Share-Based Payment and Special Purpose Entity

In: Business and Management

Submitted By morningglory0218
Words 1048
Pages 5
To: Kelly Stevens, Senior Auditor
CC: Rebecca Kime
Date: 4/28/2014
Re: Reporting for Share-Based Payment and Special Purpose Entity
We compiled the information presented to address concerns surrounding the audit of McDowells, a publicly traded company. The memo explores both share-based payment and special purpose entities. It details the proper accounting methods for each item. Finally, we offer suggestions and guidelines to ensure McDowells complies with GAAP on these matters.
Share-based payment and SPE
The transactions related to the share based payment are defined as the proceedings in which any bodies attain or get the products or services by fulfilling the two vital requirements i.e. equity instruments of the entity or cash. In this transaction, the total sum is based on the entity's shares price. The financial statement on accounting for the share-based payment will furnish the full or more reliable information to the stakeholders such as investors, lenders or other users of financial statements. This will enable them to make an appropriate judgment based on the information given and also recognize the compensation cost referring to share-based payment dealings easily.

This reporting portrays that in the financial statements making out the actual cost related to the share-based payments amends the comparability, reliability, and relevancy of that critical and valuable financial information of the company. It assists different users of financial information with understanding the dealings related to the economic conditions that affect a company and also helps in taking decisions of the resource allocation. The share based payment reporting for the company covers a broad range of share-based payments or recompense agreements that include the awards based on performance, limited share plans, share appreciation…...

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