Microsoft KB Archive/155171

Money 3.0: How To Track Employer-Offered Stock Options

PSS ID Number: Q155171 Article last modified on 07-14-1997

3.0

WINDOWS

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3.0 WINDOWS kbhowto

= SUMMARY =

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

= MORE INFORMATION =

To track Employer-Offered stock options, do the following:

  Make sure you have all your option records available.   On the Window menu, click Investment Details.   On the Lists menu, click Investment Account List, and then click the New button   Fill in the fields on the screen, giving the account a descriptive name, such as 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. Click Continue.   When asked if the account has an Associated Cash Account, click Yes, and then click OK.   Leave the Opening Balance blank in the next dialog box. Click OK, then click Close.   On the Inv Acct menu (ALT+A), click the name of your new account.   Enter a new Buy transaction, using the table below as a guide. </li>  Click ENTER. </li>  If you have multiple stock options, repeat steps 6 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 to Track Vested Options
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 which have a positive value. If the stock has declined in value since you were granted it, the option account will show a negative balance.

To Exercise 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 to track your options:

Selling The Option Stock
You must record the sale, and “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>  On the Window menu, click Investment Details. </li>  From the Inv Acct menu (ALT+A), click the name of your new account. </li>  Enter a Sell transaction, using the table below as a guide. </li>  The account to which you transferred the sale proceeds will now contain the complete amount from the sale. To subtract the exercise amount, figure the amount of cash you spent to exercise the options. This may be recorded on your statement, but you could also calculate it by multiplying the quantity of shares times the grant price. </li>  Open the Account Forms window, and go to the account where you deposited the sale’s proceeds. Enter a transfer to the Associated Cash Account, using the following table as a guide. </li></ol>

Keeping The Option Stock
You must move the stock from your option account to another Money account used to track stock you own.


 * 1) Make sure you have all your option records handy.
 * 2) In Investment Details, go to your options account, and enter a Sell transaction in your options account for the number of shares you exercised, choosing 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.

KBCategory: kbusage kbhowto KBSubcategory:

Additional reference words: w_money investments 3.0 ====================================================================== Keywords : kbhowto kbusage Version : 3.0 Platform : WINDOWS ============================================================================= Copyright Microsoft Corporation 1997.