Microsoft KB Archive/154332

Money 5 and 4: How to Track Employer-Offered Stock Options

PSS ID Number: Q154332 Article last modified on 02-07-1998

4.0 5.0

WINDOWS

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The information in this article applies to:

 Microsoft Money version 5.0 for Windows 95 == Microsoft Money version 4.0 for Windows 95 == 

= SUMMARY =

It is possible to track employer-offered stock options by setting up separate investment accounts for each grant.

= MORE INFORMATION =

How to Track Employer-Offered Stock Options
  Make sure you have all your option records available.   In the Investment Portfolio, click New, and then click A new Investment Account.   Follow the instructions on the screen, and give the account a descriptive name, such as Options at $20, where $20 is the grant price. Including the grant price will make it easier to track options granted at different prices.   When asked if the account has an Associated Cash Account, click Yes, and then leave the Opening Balance field blank in the next dialog box.   When you finish creating the account, double-click it in the Investment Portfolio. If you don’t see the options account in the list, make sure you’ve chosen Portfolio from the View bar drop-down list. </li>  Enter a new Buy transaction, using the table below as a guide. Field What to Enter —– ————- Date The date you were awarded the options Investment The name of the stock Activity Buy Quantity The number of shares in the option grant Price The per-share grant price of the options Commission Zero Total Leave this blank. The total will be calculated automatically. Transfer from Your Associated Cash Account Memo Anything you want. </li>  Click Enter. </li>  If you have been granted multiple stock options, repeat steps 2 through 7 for each grant. </li></ol>

Initially, the Associated Cash Account’s balance will have a value equal to the negative of the option’s value, and the account value will be zero. The Associated Cash Account’s balance now represents the amount you would have to pay to exercise the options and, therefore, is not part of the total value of the grant.

Tips
If you want to track only the value of shares that have vested, type only the number of vested shares in the Quantity field when you enter the Buy activity for the stock grant. In the Memo field, type the number of unvested shares for reference.

When additional shares vest, increase the number of shares in the Quantity field of the original Buy transaction, and subtract the corresponding number from the Memo field.

If you want the value of your options to be reflected in your Net Worth and investment reports, include in your reports only options accounts that have a positive value. Otherwise, if the stock value has decreased since you were granted it, the option account will show a negative balance, which is not really accurate (because you are not obligated to exercise stock options).

Exercising Stock Options
When exercising options, you can either sell the stock as soon as you purchase it, or keep the stock you purchase. Follow the appropriate procedure below:

If You Sell The Option Stock
You need to record the sale, and then “reimburse” your records to account for the exercise price.

<ol style="list-style-type: decimal;">  Make sure you have all your option granting and sale records available. </li>  In the Account Register, go to your options account, and enter a Sell transaction, using the table below as a guide. Field What to Enter —– ————- Date The date of the sale Investment The name of the stock Activity Sell Quantity The number of shares exercised Price The per-share sale price Commission Zero Total Leave this blank. The total will be calculated automatically. Transfer to The account in which you deposited the money from the sale. Memo Anything you want </li>  The account to which you transferred the sale proceeds now contains the total sale amount. To subtract the exercise amount, determine the amount of cash you spent to exercise the options. You may find this on your statement, but you can also calculate it by multiplying the quantity of shares by the grant price. </li>  Go to the account where you deposited the sale’s proceeds, and enter a transfer to the Associated Cash Account, using the following table as a guide. Field What to Enter —– ————- Number Leave this blank From The account that received the proceeds of the sale Date The date of the sale To The name of the Associated Cash Account Amount The quantity of shares sold times the grant price Pay to Leave this blank Memo Anything you want </li></ol>

If You’re Keeping the Option Stock
You will want to move the stock from your option account to another Money account that you use to track stock you own.


 * 1) Make sure you have all your option records available.
 * 2) In the Account Register, go to your options account and enter a Sell transaction for the number of shares you exercised. Choose the Associated Cash Account for the transfer account. The price for the sell should be the exercise price.
 * 3) Go to the account where you want to keep the options, and enter a Buy transaction using the exercise price. Choose the Associated Cash Account as the transfer account.

Additional query words: w_money 4.0 5.0 investments employee purchase employer options Scuz ====================================================================== Keywords : kbhowto kbfaq Version : 4.0 5.0 Platform : WINDOWS ============================================================================= Copyright Microsoft Corporation 1998.