ASC 718 stock-comp report

ASC 718 is the moment a startup leaves the spreadsheet behind: you have to put a value on the options you’ve granted and spread that cost across the years your team earns it. Tenacap measures every grant at fair value, builds the expense schedule for you, and — the part that matters at audit time — remembers exactly which assumptions it used, so a controller can reproduce any past quarter.

When you grant stock options, accounting standard ASC 718 says you owe an expense: the options are compensation, so their value has to land on your income statement over the period your people earn them. Two questions sit underneath that — what is a grant worth on the day you make it? and how much of that cost belongs to each year? This report answers both from your live records, then keeps a paper trail an auditor can follow.

What the report does

For each option grant on your cap table, Tenacap:

measures the grant-date fair value per option using the Black-Scholes-Merton model — the standard closed-form valuation for plain options;
prices it off the 409A fair market value in effect on the grant date (see 409A valuations) and the assumption set in effect on that same date;
recognizes the total cost straight-line over the grant’s vesting period, so each month earns its slice of the expense; and
handles forfeitures as they happen — when an unvested grant is cancelled, the cost it never earned is reversed.

Record an assumption set

Black-Scholes needs a handful of inputs beyond the share price and strike, and those are judgement calls you make with your accountant. Tenacap stores them as an assumption set — an effective-dated record holding:

Volatility — the expected annual volatility of the stock, as a fraction (for example 0.60).
Risk-free rate — the annual risk-free rate (for example 0.045).
Expected term — the expected life of the options in years (often the SAB 107 simplified term).
Dividend yield — usually 0 for a startup.
Forfeiture method — Tenacap accounts for forfeitures as incurred (ASU 2016-09).

An admin adds an assumption set from the report screen. Each set carries an effective date, and a grant always resolves the set in effect on the day it was granted — exactly the way a grant resolves the 409A valuation in effect at the time. Need to change an assumption? Add a new set with a later effective date; older grants keep the set they were valued under, so nothing already booked silently shifts.

ScreenshotThe assumption-set table with effective date, volatility, risk-free rate, term, dividend yield, and forfeiture method, plus the admin add form

Open the report

Reach the ASC 718 report from the compliance hub, or directly from your company’s records alongside the cap table. It opens with a summary at the top — total grant-date fair value across all grants, how much you’ve recognized to date, and how much is still unrecognized (the future expense yet to land) — as of today’s date.

ScreenshotThe ASC 718 report summary showing total fair value, recognized to date, and unrecognized future expense

Reading the schedule

Below the summary the report breaks the numbers down three ways:

Grant population — every grant, line by line: holder, grant date, number of options, fair value per share, total fair value, and how much is recognized versus unrecognized. Forfeited grants are flagged so you can see where a reversal happened.
Annual expense schedule — the recognized stock-comp expense per year, which is what flows to your income statement.
Excluded grants — any grant the report couldn’t value, with the reason (covered just below).

ScreenshotThe grant population table with per-grant fair value, recognized, and unrecognized amounts, and the annual expense schedule

Excluded grants

If a grant can’t be valued, Tenacap doesn’t guess — it lists the grant in an excluded section with the reason, so the gap is visible rather than buried. The two common reasons are:

No 409A FMV in effect at the grant date — there’s no active valuation covering that day.
No ASC 718 assumption set in effect at the grant date — no set’s effective date falls on or before the grant.

The fix in both cases is to make sure the dated record exists: record the relevant 409A valuation, or have an admin add an assumption set with an early-enough effective date. Once the inputs are in place, the grant moves into the population on the next load.

Download the CSV

From the report header, Download CSV pulls the grant population out as a plain comma-separated file — holder, grant date, options, fair value per share, total fair value, recognized to date, unrecognized, and whether the grant was forfeited. It’s built for journal-entry and auditor support: hand it to your accountant, drop it into a working paper, or reconcile it against your books. For everything else you might need to take out of Tenacap, see Export & open schema.