Schwab Offers International Financial Reporting in Stock Plan Solution

Charles Schwab has added integrated IFRS 2 reporting functionality into its Schwab EquiView recordkeeping system for corporate stock plan clients.

The company explained that IFRS 2 is the portion of the International Financial Reporting Standards that specifically addresses the expensing of equity compensation granted by companies. While a decision by the SEC that would mandate U.S.-based companies to adhere to IFRS is not expected until 2011, some companies already have statutory IFRS reporting obligations, and a growing number are evaluating how they might proactively meet the standards, according to a Schwab press release.

Schwab EquiView’s new reporting functionality includes valuation, expense, and disclosure reporting. It is fully integrated into the overall Schwab EquiView application, which keeps financial reports up-to-date with the latest employee award and transaction data.

To compare impact to expense and tax accruals and better plan and prepare for a shift to IFRS, corporate stock plan administrators can also simultaneously create reports under both IFRS and the existing Financial Accounting Standards (FAS 123R) they use, Schwab said.

According to a recent Schwab-commissioned study of 200 corporate stock plan decision makers, 36% of participating companies report that they are currently meeting IFRS for all employees. Of the firms reporting that they are not yet meeting the international standards for all employees, 44% say they plan to fully meet the international standards by 2011, and 60% say they’ll be in full compliance by 2012. Seventeen percent say they will meet the standards when they actually go into effect.

The enhancements to Schwab EquiView are designed for companies, which already have an IFRS reporting obligation, such as U.S.-based companies with international subsidiaries, and for companies which are in the process of determining how and when they will adopt the standards.

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