ESOP Schemes & ESOP Valuation

ESOP Schemes & ESOP valuation

Employee stock option plans are being increasingly used as a compensation tool by many indian and multinational companies. The compelling reasons for companies to implement ESOPs include wealth creators for its employees and retention. it also provides a measure of employee ownership in a high growth environment.

What is ESOP?

An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company; this interest takes the form of shares of stock. ESOPs give the sponsoring company—the selling shareholder—and participants various tax benefits, making them qualified plans. Employers often use ESOPs as a corporate-finance strategy to align the interests of their employees with those of their shareholders.

ESOP Valuation

We have a dedicated team looking after end to end ESOP valuation services, both accounting as well as tax supported. Kashyap &Associates provide assistance in accounting entriesto book compensation cost in book of accounts.

Purpose of ESOP Valuation

ESOP valuation is required for accounting purpose for booking compensation expense by company issuing esop’s over vesting period and for taxation purpose for calculation of perquisite tax payable by its employees.