Stock compensation award modifications continue to be a challenging area with many factors to consider—and mishaps to avoid. In this episode, host Heather Horn is joined by PwC National office subject matter specialists Jay Seliber and Nicole Berman to discuss the fundamentals of modification accounting, including:

• 1:00 - Overview. Before diving into modifications, we start by discussing how a company would generally account for a stock award.
• 2:37 - Types of modifications. When is a change to an award considered a modification? Nicole provides an overview of the accounting for the four types of modifications. 
• 7:46 - Cessation of employment. What happens when an award recipient decides to leave the company? Jay and Nicole discuss the accounting for related modifications.
• 14:56 - Changes in performance conditions. Given the market impact of COVID-19, companies may be adjusting their performance targets. Nicole walks through the model for this type of modification. 
• 23:01 - Spin-offs, stock splits, and large dividends. Next we move onto how different corporate actions result in award modifications.

Jay Seliber is a partner in PwC’s National Accounting Services group with over 30 years of experience. He helps clients with their most complex accounting matters, particularly in the areas of revenue recognition, M&A, stock compensation, employee benefits, restructurings, impairments, and financing transactions.

Nicole Berman is a Director in PwC's National office advising clients on the accounting for complex transactions related to revenue recognition and employee compensation matters, including stock-based compensation, pensions, OPEB, and restructurings, under both US GAAP and IFRS. 

Heather Horn  is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].