On Sat, Oct 18, 2014 at 1:42 PM, Harpreet Sangha <[email protected]> wrote:
> I use balance assertions as follows as a part of my reconciliation process:
>
> 2014/09/30 Statement Balance
> Asset:Checking 0 = $BALANCE
>
>
> I have an employer stock plan with E-Trade where "Stock Plan" is the
> account, but within it RSUs and ESPPs are tracked separately. On
> statements only the total Stock Plan balance is provided.
>
> To simplify the reconciliation process I was hoping to be able to do
> something as follows:
>
> 2014/09/15 Vesting
> Asset:Stock Plan:RSU 1 STOCK
> Income:Equity Bonus 1 STOCK
>
> 2014/09/16 Purchase
> Asset:Stock Plan:ESPP 1 STOCK @@ $COST
> Asset:Stock Plan:ESPP $COST
>
> 2014/09/30 Statement Balance
> Asset:Stock Plan 0 = 2 STOCK
>
>
> This exact method doesn't appear to be possible. Should this be possible?
> Did I make a mistake in using this? Any tips on other methods to achieve
> this?
>
I'm in an analogous situation, but it's a little more complicated than
yours because my employer sells a portion of the shares in order to cover
for the taxes at the moment of vesting. Because they can only sell an
integral number of shares, there is a little bit of cash remaining, to be
paid later on yet another pay stub (just for that). Plus they do this
_separately_ for every stock grant (so every grant is subject to rounding,
which is not optimal). But it's otherwise similar.
Let's take your example above, this is how I would account for it (I'll use
Beancount syntax but you should be able to translate to Ledger):
2012-01-01 open Assets:Stock-Plan:ESPP:Cash
2012-01-01 open Assets:Stock-Plan:ESPP:STOCK
2012-01-01 open Income:Equity-Bonus
;; First, you likely will receive some sort of pay stub or statement
listing the
;; cash value that is being vested. This is to be treated as income from
the POV
;; of taxes, so account for this on a cash basis. This transaction
corresponds
;; to the company disbursing cash to the cash account in your ESPP. That's
;; income, the income amount needs to be negative. Create a "Cash"
subaccount
;; within your ESPP account and deposit the cash equivalent to that account.
;; It's quite likely you already receive a pay stub for that cash amount.
2014-09-15 * "Vesting"
Assets:Stock-Plan:ESPP:Cash 172.00 USD
Income:Equity-Bonus -172.00 USD
;; Then the cash account gets converted to stock automatically. In practice,
;; your employer probably holds share certificate with ETrade that get
deposited
;; in your ESPP account directly, but they get deposited at the cost basis
of
;; the price that is current when you vest. This is exactly the same as a
stock
;; purchase, so it's reasonable to treat this as a purchase. I would use a
;; dedicated subaccount for shares of "STOCK" units.
2014-09-16 * "Purchase (RSU Conversion)"
Assets:Stock-Plan:ESPP:STOCK 2 STOCK {86.00 USD}
Assets:Stock-Plan:ESPP:Cash -172.00 USD
;; There you can check your balance in the stock account, like this.
2014-09-30 balance Assets:Stock-Plan:ESPP:STOCK 2 STOCK
This works, but a shortfall is that it does not keep track of the amount of
unvested shares (RSUs) remaining.
You could track your unvested units using a new kind of unit, let's call it
"RSU":
2012-01-01 open Assets:Stock-Plan:ESPP:Cash
2012-01-01 open Assets:Stock-Plan:ESPP:STOCK
2012-01-01 open Assets:Stock-Plan:ESPP:RSU
2012-01-01 open Income:Equity-Bonus:Vested
2012-01-01 open Income:Equity-Bonus:RSU
2012-01-01 open Expenses:Vested-Shares
;; When you receive a grand, you could account for the unvested amount using
;; different units. I would caution you away from using the cash basis or
from
;; units the same units you will use for the stock itself, because these are
;; only "promised" units. If you leave the company, they will vanish (you
will
;; have to write them off). Also, because their value depends on the future
;; price, and that the price at the moment of the grant is not at all
entering
;; into P/L calculations, you should ignore it too--don't hold these at
cost.
;; So deposit these "promised" units to a dedicated account:
2014-01-01 * "Grant"
Assets:Stock-Plan:ESPP:RSU 100 RSU
Income:Equity-Bonus:RSU -100 RSU
;; Note that the "income" leg here is not a taxable event. Someone just
made a
;; promise to you. Don't confuse this with income from vesting.
;; Then when you vest the shares, you can deduct the corresponding amount of
;; RSUs in the same transaction and mark yourself an Expense account to keep
;; track of the number of shares you vested:
2014-09-15 * "Vesting"
Assets:Stock-Plan:ESPP:RSU -2 RSU
Expenses:Vested-Shares 2 RSU
Assets:Stock-Plan:ESPP:Cash 172.00 USD
Income:Equity-Bonus:Vested -172.00 USD
;; Then the rest follows as previously.
2014-09-16 * "Purchase"
Assets:Stock-Plan:ESPP:STOCK 2 STOCK {86.00 USD}
Assets:Stock-Plan:ESPP:Cash -172.00 USD
2014-09-30 balance Assets:Stock-Plan:ESPP:STOCK 2 STOCK
Finally, if you don't like the idea of the intermediate cash deposit, you
could collapse the two transactions and account for them as one:
2012-01-01 open Assets:Stock-Plan:ESPP:STOCK
2012-01-01 open Assets:Stock-Plan:ESPP:RSU
2012-01-01 open Income:Equity-Bonus:Vested
2012-01-01 open Income:Equity-Bonus:RSU
2012-01-01 open Expenses:Vested-Shares
2014-01-01 * "Grant"
Assets:Stock-Plan:ESPP:RSU 100 RSU
Income:Equity-Bonus:RSU -100 RSU
2014-09-16 * "Vesting & Purchase"
Assets:Stock-Plan:ESPP:RSU -2 RSU
Expenses:Vested-Shares 2 RSU
Assets:Stock-Plan:ESPP:STOCK 2 STOCK {86.00 USD}
Income:Equity-Bonus:Vested -172.00 USD
2014-09-30 balance Assets:Stock-Plan:ESPP:STOCK 2 STOCK
I personally go for the second method because in my case a dedicated
paystub is issued on a date different from that of the purchase (and from
your example I want to guess yours is like that too).
I hope this helps,
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