MAA » Topics » Accounting for Stock Issued to Employees

This excerpt taken from the MAA 8-K filed May 29, 2009.
Accounting for Stock Issued to Employees. Statement 123R requires compensation costs related to share-based payment transactions be recognized in the financial statements. With limited exceptions, the amount of compensation cost is measured based on the grant-date fair value of the equity or the liability instruments issued. In addition, liability awards are remeasured each reporting period. Compensation cost is recognized over the period that an employee provides service in exchange for the award.

Mid-America adopted Statement 123R effective January 1, 2006 using the “modified prospective” method permitted by Statement 123R in which compensation cost is recognized beginning with the effective date (a) based on the requirements of Statement 123R for all share-based payments granted after the effective date and (b) based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of Statement 123R that remain unvested on the effective date. The effect of adopting Statement 123R for the year ended December 31, 2006 was an increase of approximately $669,000 in net income from continuing operations and in consolidated net income, resulting in an increase of approximately $0.03 in basic earnings per share and $0.02 in diluted earnings per share. These increases occurred primarily because the fair market values assigned to certain plans at grant date were not impacted by the increase in share price that Mid-America had experienced over the prior two years, resulting in plans generating higher payouts for participants than their fair market value models would have predicted based on then stock price volatility. This series of events resulted in the amount recorded to compensation expense in accordance with Statement 123R being smaller than the actual number of shares issued times their issue price. The adoption of Statement 123R had no impact on cash flow from operations or cash flow from financing activities.

These excerpts taken from the MAA 10-K filed Feb 25, 2009.
Accounting for Stock Issued to Employees. Statement 123R requires compensation costs related to share-based payment transactions be recognized in the financial statements. With limited exceptions, the amount of compensation cost is measured based on the grant-date fair value of the equity or the liability instruments issued. In addition, liability awards are remeasured each reporting period. Compensation cost is recognized over the period that an employee provides service in exchange for the award.

F-13


       Mid-America adopted Statement 123R effective January 1, 2006 using the “modified prospective” method permitted by Statement 123R in which compensation cost is recognized beginning with the effective date (a) based on the requirements of Statement 123R for all share-based payments granted after the effective date and (b) based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of Statement 123R that remain unvested on the effective date. The effect of adopting Statement 123R for the year ended December 31, 2006 was an increase of approximately $669,000 in net income from continuing operations and in net income, resulting in an increase of approximately $0.03 in basic earnings per share and $0.02 in diluted earnings per share. These increases occurred primarily because the fair market values assigned to certain plans at grant date were not impacted by the increase in share price that Mid-America had experienced over the prior two years, resulting in plans generating higher payouts for participants than their fair market value models would have predicted based on then stock price volatility. This series of events resulted in the amount recorded to compensation expense in accordance with Statement 123R being smaller than the actual number of shares issued times their issue price. The adoption of Statement 123R had no impact on cash flow from operations or cash flow from financing activities.

Accounting for Stock Issued to
Employees
. Statement 123R requires
compensation costs related to share-based payment transactions be recognized in
the financial statements. With limited exceptions, the amount of compensation
cost is measured based on the grant-date fair value of the equity or the
liability instruments issued. In addition, liability awards are remeasured each
reporting period. Compensation cost is recognized over the period that an
employee provides service in exchange for the award.


F-13





      
Mid-America adopted Statement 123R effective January 1, 2006 using the “modified
prospective” method permitted by Statement 123R in which compensation cost is
recognized beginning with the effective date (a) based on the requirements of
Statement 123R for all share-based payments granted after the effective date and
(b) based on the requirements of Statement 123 for all awards granted to
employees prior to the effective date of Statement 123R that remain unvested on
the effective date. The effect of adopting Statement 123R for the year ended
December 31, 2006 was an increase of approximately $669,000 in net income from
continuing operations and in net income, resulting in an increase of
approximately $0.03 in basic earnings per share and $0.02 in diluted earnings
per share. These increases occurred primarily because the fair market values
assigned to certain plans at grant date were not impacted by the increase in
share price that Mid-America had experienced over the prior two years, resulting
in plans generating higher payouts for participants than their fair market value
models would have predicted based on then stock price volatility. This series of
events resulted in the amount recorded to compensation expense in accordance
with Statement 123R being smaller than the actual number of shares issued times
their issue price. The adoption of Statement 123R had no impact on cash flow
from operations or cash flow from financing activities.


These excerpts taken from the MAA 10-K filed Feb 27, 2008.
Accounting for Stock Issued to Employees. Statement 123R requires compensation costs related to share-based payment transactions be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or the liability instruments issued. In addition, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. Statement 123R is effective as of the beginning of the first annual reporting period that begins after June 15, 2005.

     Mid-America adopted Statement 123R effective January 1, 2006 using the “modified prospective” method permitted by Statement 123R in which compensation cost is recognized beginning with the effective date (a) based on the requirements of Statement 123R for all share-based payments granted after the effective date and (b) based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of Statement 123R that remain unvested on the effective date. The effect of adopting Statement 123R for the twelve months ending December 31, 2006 was an increase of approximately $668,862 in net income from continuing operations and in net income, resulting in an increase of approximately $0.03 in basic earnings per share and $0.02 in diluted earnings per share. These increases occurred primarily because the fair market values assigned to certain plans at grant date were not impacted by the increase in share price that Mid-America has experienced over the last two years, resulting in plans generating higher payouts for participants than their fair market value models would have predicted based on then stock price volatility. This series of events resulted in the amount recorded to compensation expense in accordance with Statement 123R being smaller than the actual number of shares issued times their issue price. The adoption of Statement 123R had no impact on cash flow from operations or cash flow from financing activities.

F-15


     The modified prospective method of Statement 123R does not require prior periods to be restated to reflect the amount of compensation cost that would have been reflected in the financial statements. The following table reflects the effect on net income if Statement 123R had been used by Mid-America along with the applicable assumptions utilized in the Black-Scholes option pricing model calculation for those periods in which option grants were issued (dollars and shares in thousands, except per share data):

  Twelve Months Ended
     December 31, 2005
Net income $ 19,744
Preferred dividend distribution 14,329
Net income available for
     common shareholders 5,415
Add: Stock-based employee
     compensation expense included
     in reported net income 887
Less: Stock-based employee
     compensation expense from
     employee stock purchase plan discount 32
Less: Stock-based employee
     compensation expense determined
     under fair value method of accounting 492
Pro forma net income available for
     common shareholders $ 5,778
 
Average common shares outstanding - Basic 21,405
Average common shares outstanding - Diluted 21,607
 
Net income available per common share:
     Basic as reported $ 0.25
     Basic pro forma $ 0.27
     Diluted as reported $ 0.25
     Diluted pro forma $ 0.27
 
Assumptions:(1)
     Risk free interest rate N/A
     Expected life - Years N/A
     Expected volatility N/A
     Expected dividends N/A

(1)       No grants were issued in the periods shown.

Accounting for Stock Issued to Employees. Statement 123R requires compensation costs related to
share-based payment transactions be recognized in the financial statements. With
limited exceptions, the amount of compensation cost will be measured based on
the grant-date fair value of the equity or the liability instruments issued. In
addition, liability awards will be remeasured each reporting period.
Compensation cost will be recognized over the period that an employee provides
service in exchange for the award. Statement 123R is effective as of the
beginning of the first annual reporting period that begins after June 15,
2005.


     Mid-America adopted Statement 123R
effective January 1, 2006 using the “modified prospective” method permitted by
Statement 123R in which compensation cost is recognized beginning with the
effective date (a) based on the requirements of Statement 123R for all
share-based payments granted after the effective date and (b) based on the
requirements of Statement 123 for all awards granted to employees prior to the
effective date of Statement 123R that remain unvested on the effective date. The
effect of adopting Statement 123R for the twelve months ending December 31, 2006
was an increase of approximately $668,862 in net income from continuing
operations and in net income, resulting in an increase of approximately $0.03 in
basic earnings per share and $0.02 in diluted earnings per share. These
increases occurred primarily because the fair market values assigned to certain
plans at grant date were not impacted by the increase in share price that
Mid-America has experienced over the last two years, resulting in plans
generating higher payouts for participants than their fair market value models
would have predicted based on then stock price volatility. This series of events
resulted in the amount recorded to compensation expense in accordance with
Statement 123R being smaller than the actual number of shares issued times their
issue price. The adoption of Statement 123R had no impact on cash flow from
operations or cash flow from financing activities.


F-15





     The modified prospective method of
Statement 123R does not require prior periods to be restated to reflect the
amount of compensation cost that would have been reflected in the financial
statements. The following table reflects the effect on net income if Statement
123R had been used by Mid-America along with the applicable assumptions utilized
in the Black-Scholes option pricing model calculation for those periods in which
option grants were issued (dollars and shares in thousands, except per share
data):

























































































































































  Twelve Months Ended
     December 31, 2005
Net
income
$ 19,744
Preferred dividend
distribution
14,329
Net
income available for
     common shareholders 5,415
Add: Stock-based
employee
     compensation expense included
     in
reported net income
887
Less:
Stock-based employee
     compensation expense from
     employee stock purchase plan discount 32
Less: Stock-based
employee
     compensation expense determined
     under fair value method of accounting 492
Pro
forma net income available for
     common shareholders $ 5,778
 
Average
common shares outstanding - Basic
21,405
Average common shares
outstanding - Diluted
21,607
 
Net
income available per common share:
     Basic as reported $ 0.25
     Basic pro forma $ 0.27
     Diluted as reported $ 0.25
     Diluted pro forma $ 0.27
 
Assumptions:(1)
     Risk free interest rate N/A
     Expected life - Years N/A
     Expected volatility N/A
     Expected dividends N/A







(1)       No grants were issued
in the periods shown.


This excerpt taken from the MAA 10-K filed Feb 28, 2007.
Accounting for Stock Issued to Employees. Statement 123(R) requires compensation costs related to share-based payment transactions be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or the liability instruments issued. In addition, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. Statement 123(R) is effective as of the beginning of the first annual reporting period that begins after June 15, 2005.

     Mid-America adopted Statement 123(R) effective January 1, 2006 using the “modified prospective” method permitted by Statement 123(R) in which compensation cost is recognized beginning with the effective date (a) based on the requirements of Statement 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of Statement 123(R) that remain unvested on the effective date. The effect of adopting Statement 123(R) for the twelve months ending December 31, 2006 was an increase of approximately $668,862 in net income from continuing operations and in net income, resulting in an increase of approximately $0.03 in basic earnings per share and $0.02 in diluted earnings per share. These increases occurred primarily because the fair market values assigned to certain plans at grant date were not impacted by the increase in share price that Mid-America has experienced over the last two years, resulting in plans generating higher payouts for participants than their fair market value models would have predicted based on then stock price volatility. This series of events resulted in the amount booked to compensation expense in accordance with Statement 123(R) being smaller than the actual number of shares issued times their issue price. The adoption of Statement 123(R) had no impact on cash flow from operations or cash flow from financing activities.

F-13


     The modified prospective method of Statement 123(R) does not require prior periods to be restated to reflect the amount of compensation cost that would have been reflected in the financial statements. The following table reflects the effect on net income if Statement 123(R) had been used by Mid-America along with the applicable assumptions utilized in the Black-Scholes option pricing model calculation for those periods in which option grants were issued (dollars and shares in thousands, except per share data):

        Twelve Months Ended
   December 31,
   2005       2004
Net income  $  19,744   $  25,198
Preferred dividend distribution     14,329    14,825
Net income available for common shareholders     5,415    10,373
Add: Stock-based employee compensation expense included         
     in reported net income     887    
Less: Stock-based employee compensation expense from employee         
     stock purchase plan discount     32    27
Less: Stock-based employee compensation expense determined         
     under fair value method of accounting     492    405
Pro forma net income available for common shareholders  $  5,778 $  9,941
Average common shares outstanding - Basic     21,405    20,317
Average common shares outstanding - Diluted     21,607    20,652
Net income available per common share:         
     Basic as reported  $  0.25 $  0.51
     Basic pro forma  $  0.27 $  0.49
     Diluted as reported  $  0.25 $  0.50
     Diluted pro forma  $  0.27 $  0.48
 
Assumptions:(1)         
     Risk free interest rate     N/A    N/A
     Expected life - Years     N/A    N/A
     Expected volatility     N/A    N/A
     Expected dividends     N/A    N/A
____________________

(1)      No grants were issued in the periods shown.
This excerpt taken from the MAA 10-Q filed Oct 31, 2005.
Accounting for Stock Issued to Employees. Statement 123(R) will require compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or the liability instruments issued. In addition, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. Statement 123(R) is effective as of the beginning of the first annual reporting period that begins after June 15, 2005. The Company will

 

 

 

adopt Statement 123(R) effective January 1, 2006 and does not believe it will have a material impact on the Company’s consolidated financial condition or results of operations taken as a whole.

 

In March 2005, the SEC issued SAB 107 to provide public companies additional guidance in applying the provisions of Statement 123(R). Among other things, SAB 107 describes the SEC staff's expectations in determining the assumptions that underlie the fair value estimates and discusses the interaction of Statement 123(R) with certain existing SEC guidance. The guidance is also beneficial to users of financial statements in analyzing the information provided under statement 123(R). SAB 107 will be applied upon the adoption of Statement 123(R).

 

In March 2005, the FASB issued Interpretation No. 47,

This excerpt taken from the MAA 10-Q filed Aug 4, 2005.
Accounting for Stock Issued to Employees. Statement 123(R) will require compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or the liability instruments issued. In addition, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. Statement 123(R) is effective as of the beginning of the first annual reporting period that begins after June 15, 2005. The Company will adopt Statement 123(R) effective January 1, 2006 and does not believe it will have a material impact on the Company’s consolidated financial condition or results of operations taken as a whole.

 

In March 2005, the SEC issued SAB 107 to provide public companies additional guidance in applying the provisions of Statement 123(R). Among other things, SAB 107 describes the SEC staff's expectations in determining the assumptions that underlie the fair value estimates and discusses the interaction of Statement 123(R) with certain existing SEC guidance. The guidance is also beneficial to users of financial statements in analyzing the information provided under statement (123)R. SAB 107 will be applied upon the adoption of Statement 123(R).

 

In March 2005, the FASB issued Interpretation No. 47,

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki