Reporting

International Recharge Support

Recharge agreements are a way for multinational companies to reduce the after-tax cost of equity compensation for their employees in foreign subsidiaries. In a recharge agreement, the subsidiary pays back the US parent for the cost of the equity. The payment is tax-deductible for the subsidiary, and that tax benefit rolls up into the worldwide consolidated financial statement. Meanwhile, the US parent receives the cash from that payment tax-free. According to our surveys, just under 50% of companies have implemented recharge agreements. Among companies with over 1,000 participants, 82% have recharge procedures in place.

Services

We can help. As part of this service, we do the following:

  • Quantify the benefits of a recharge agreement based on historical data
  • Establish processes for efficient billing of foreign subsidiaries for the cost of equity issued to employees in those subsidiaries
  • Support accruals of future billings for distribution to foreign subsidiaries
  • Embed the impact of employee mobility into recharging, showing time spent in each jurisdiction and appropriate pro-rations

Rely on Equity Methods for the reporting and billing infrastructure to facilitate inter-company recharge agreements.

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Additional Resources

articleBlog Post

2020 Group Five Stock Plan Administration Benchmarking Results and What’s Ahead in Stock Compensation Reporting

See Equity Methods’ results from the 2020 survey of plan sponsors and get our take on the issues that are top of mind for stock-based compensation.

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two_pagerWhite Paper

Recharge Agreements

Recharge agreements minimize the after-tax cost of issuing equity compensation overseas. But they also have their challenges. Learn more in our white paper.

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descriptionIssue Brief

Mobility Tracking and Your Equity Award Accounting

Employee mobility cuts across all facets of share-based payment accounting. In this concise issue brief, we discuss the implications of mobility on expense allocation, deferred taxes, recharging, and IFRS 2 statutory reporting.

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mimoWebcast

Maximizing Corporate Tax and Income Benefits for Global & Mobile Workforces

Presented at the 23rd Annual NASPP Conference in San Diego, CA, this presentation covers strategies for getting the most out of corporate tax and income benefits.

Download the Slides
mimoWebcast

Reconsidering Recharges

Slides from presentation given at the 8th Annual CEP Symposium. Panelists: Ellie Kehmeier, Takis Makridis, Marlene Zobayan  

Download the Slides

Meet Our Experts

Amit Tekwani

Managing Director and Financial Reporting Practice Leader

Raenelle James

Managing Director, Financial Reporting Services

Daniel Hunninghake, CPA

Managing Director, Financial Reporting Services

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