If your company grants stock options or equity awards, ASC 718 determines how that compensation hits your financial statements. Here's what founders need to know before their first audit.

For funds whose portfolios consist primarily of illiquid, privately-held investments, ASC 820 compliance is one of the most complex and judgment-intensive areas of financial reporting. The valuation of a single portfolio company can require multiple methodologies, significant assumptions about future outcomes, and detailed documentation that satisfies auditors, LPs, and regulators.

If you're transferring anything other than publicly traded securities or cash, you almost certainly need a formal valuation. Here's when it's required, when it's recommended, and what's at stake.

A 409A valuation is an independent appraisal of the fair market value (FMV) of a private company's common stock. Its primary purpose is to establish the minimum exercise price (also called the "strike price") at which employee stock options can be granted without triggering adverse tax consequences under IRC Section 409A.