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ESOP treatment at the time of Sale by Employees.

A/c entries 135 views 1 replies

Mohit Pathak

8 Points Joined November 2016

A Startup company issued 1000 ESOP @ 10 per share (face value) to its employees. The company went into acquisition and the acquirer bought all the ESOP at market price say 100 per share. The Acquiring company booked it as "Investment in the Startup" with the price paid i.e. 1000 x 100 = 1,00,000, however, in Startup's books the amount is standing as 100 x 10 = 10,000.
Now when the company is trying to consolidate the books there is a difference of 90000.

How should the Startup incorporate the transaction between the Acquiring company and Shareholders (employees holding ESOP) to match the investment amount as standing in Acquiring company's books of account.\?

Replies (1)

Yasaswi Gomes new

Finance

4545 Points Joined September 2020

Esop are rubbish, they uneducated, they are violent and I intend to finish them, and beggars are esop cause they joined a process at young ages and don't want move away to explore the world. I do that always gaining knowledge and forget the knowledge when I don't work on it. The best way is hire from colleges and hr agencies directly and pay what you have to pay without paying them more after ten years.