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What You Don't Know About Tax Accounting CAN Hurt You

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August 12, 2014 | Barbara Baksa

What You Don't Know About Tax Accounting CAN Hurt You

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.

For today's "Meet the Speaker" interview, we feature an interview with Ellie Kehmeier of Steele Consulting, who will lead the session "What You Don't Know About Tax Accounting CAN Hurt You."  Here is what Ellie had to say:

NASPP:  What is a common misperception about your topic?

Ellie: A very common misperception is that tax accounting for equity compensation is only relevant to members of the tax department.  However, this issue is just one of many that the tax department deals with, and most tax professionals don't specialize in equity compensation.  A stock plan administrator that understands these concepts can help make sure numbers are correct, errors in the financial statements are avoided, and can streamline the process by making sure the right reports are run the first time around.

NASPP:  What common mistake do companies make and how can they avoid it?

Ellie: One common mistake that I see relates to the requirement that companies reclassify excess tax benefits ("windfalls") from operating to financing cash flow on the statement of cash flows.  I can look at a company's financial statements and spot potential problems in two minutes.  This reporting requirement is often handled by the SEC reporting group instead of tax, with data from stock plan administration.  If the stock plan administration professional knows what is needed here, this is a really easy mistake to avoid.  A number of other common mistakes are made because people don't understand this area very well or don't understand when they need some specialized help.  Our panel's goal is to demystify the issues, and help the tax and stock plan admin people learn ways to help each other get it right with the least amount of pain possible!

NASPP:  What is the silver lining to your topic?

Ellie: A silver lining to the complexities of tax accounting for equity comp?  Does having this be my main source of revenue for the last ten years count?  Okay, a silver lining to this topic is that if people follow our suggestions, then tax and stock plan admin will develop a deeper appreciation and (we hope) fondness for each other.  And the stock plan admin professionals will minimize the time they spend running reports out of their equity-tracking software, because they'll better understand what they need, and what questions they need to ask of their tax counterparts, to get it right the first time and keep the tax folks out of trouble!

NASPP:  Tell us three things people don't know about you.

Ellie: Gosh, I'm such an open book.  Okay, let me try:

  1. I was supposed to be a forest ranger when I grew up.
  2. Related to number 1, I love camping.  When our youngest goes off to college in the fall, we're going off camping with our new air mattress and sleeping bags.  Looking forward to waking up to birds chirping and my husband's mean camp "mcmuffins."
  3. I'm a chocoholic, especially good dark chocolate with nuts. I'm currently addicted to home-made banana splits with vanilla ice-cream, peanuts and chocolate sauce (and it doesn't even have to the good stuff).

Don’t miss Ellie’s session “What You Don't Know About Tax Accounting CAN Hurt You” at the NASPP Conference!

About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year's program features 60+ sessions on today's most timely topics in stock compensation; check out the full agenda and register today!

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The National Association of Stock Plan Professionals is the largest and oldest professional association for the stock and executive compensation community, with over two decades of leadership providing expert resources, education and other benefits for our more than 6,000 members across 32 affiliated chapters.

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