Employee Compensation and Financial Reporting

About Course

Introduction:

Understanding employee compensation, particularly in the context of financial reporting, is crucial for businesses, accountants, and financial professionals. This course provides a detailed exploration of employee compensation, share-based payments, and key standards like IFRS 2 and US GAAP. Through practical examples, problem-solving sessions, and comparative analysis of international financial reporting standards, students will gain insights into the complex world of compensation and its financial implications.

Section 1: Economics

This section introduces the foundation of employee compensation, focusing on its role in economics and business. Students will start with Lecture 1: Introduction to Employee Compensation, where they will learn about the basic components and importance of compensation in a corporate context. This lecture serves as an introduction to understanding how compensation impacts company performance, employee satisfaction, and financial reporting.

Section 2: Example

Moving into practical examples, this section provides hands-on understanding of compensation and stock-related payments. In Lecture 2: Basic of Common Stocks, students will learn the basics of common stocks and their relevance to employee compensation. Lectures 3 and 4 will walk students through real-world examples, focusing on how companies structure compensation packages using common stocks and stock options. These examples set the stage for more advanced topics, demonstrating how companies use share-based payments to attract and retain talent.

Section 3: Doing Problems

This section emphasizes problem-solving and practical application. Lectures 5, 6, and 7—Let’s Start Doing Problems—will guide students through increasingly complex problems related to employee compensation and stock-based payments. By working on these exercises, students will solidify their understanding of the key concepts introduced earlier, ensuring they are equipped to tackle real-world scenarios.

Section 4: IFRS 2

Understanding the financial standards surrounding employee compensation is vital for accurate reporting. This section introduces IFRS 2: Share-Based Payment, a critical standard for companies using stock-based compensation. In Lecture 8, students will learn about the Vesting Conditions of IFRS 2, followed by Lecture 9: Objective of IFRS 2, which outlines the goals of this standard. Lecture 10 explores the Modifications of IFRS 2, detailing how changes in compensation arrangements affect financial reporting. Finally, Lecture 11 covers Accounting for Share-Based Payments, ensuring students grasp how these transactions are reflected in financial statements.

Section 5: IFRS vs. US GAAP

In this section, students will compare IFRS and US GAAP in the context of employee compensation. Lectures 12 and 13 present the major differences between these two accounting frameworks, with Lecture 14 offering more in-depth analysis. The focus shifts to Cash-Settled Transactions in Lecture 15, where students will learn how cash-based employee compensation is treated under both standards. Lecture 16 delves into the Deferred Tax Implications of compensation packages, providing a crucial look at how taxes affect compensation costs. To solidify the lessons, Lectures 17 and 18 examine Employee Compensation at Facebook, showcasing a real-world application of compensation policies and financial reporting.

Section 6: Conclusion

In the final section, Lecture 19: Conclusion wraps up the course by reviewing key takeaways, reinforcing the connection between employee compensation, financial reporting, and business strategy. This lecture ensures that students leave with a comprehensive understanding of how compensation is managed and reported, preparing them for future roles in finance or accounting.

This course provides a complete guide to understanding employee compensation and its financial reporting requirements. From basic concepts to complex examples and international accounting standards, students will leave with practical skills they can apply in their professional careers. By focusing on real-world scenarios and problem-solving, the course ensures that participants gain a strong grasp of compensation’s financial and economic impact.

What Will You Learn?

Introduction to Employee Compensation: Understand the basics of employee compensation, including stock-based payments and their financial implications.
Common Stocks and Practical Examples: Learn the fundamentals of common stocks and apply the knowledge through real-world examples and exercises.
Problem-Solving: Engage in hands-on practice with compensation-related problems to deepen understanding and reinforce concepts.
Share-Based Payments: Explore the vesting conditions, objectives, and modifications of IFRS 2, which governs share-based payments.
Accounting for Share-Based Payments: Learn how to account for share-based payments under IFRS and recognize their impact on financial statements.
IFRS vs. US GAAP: Compare and contrast IFRS and US GAAP standards related to employee compensation and understand the differences.
Cash-Settled Transactions: Analyze cash-settled share-based payment transactions and their accounting treatment.
Deferred Tax Implications: Understand the deferred tax implications of stock-based compensation.
Real-World Case Study: Study employee compensation structures using examples from companies like Facebook to gain practical insights.
Conclusion: Summarize the key takeaways on employee compensation, financial reporting, and international accounting standards.

Material Includes

2 hours on-demand video
1 downloadable resource

Requirements

Basic Knowledge of Accounting: Students should have a foundational understanding of accounting principles, such as financial statements and general ledger concepts.
Familiarity with Financial Reporting: A basic grasp of financial reporting and how transactions affect income statements, balance sheets, and cash flow statements is recommended.
Interest in Employee Compensation and Stock-Based Payments: The course is designed for those interested in understanding the nuances of employee compensation, particularly in relation to stock-based payments.
Willingness to Work on Practical Problems: Since the course involves hands-on problem-solving, students should be prepared to engage in exercises and examples.
Basic Understanding of International Accounting Standards (IFRS and US GAAP): While the course will cover differences between IFRS and US GAAP, a rudimentary understanding of accounting standards will be beneficial.

Target Audience

Accounting and Finance Professionals: Those working in accounting, auditing, or finance who want to enhance their knowledge of employee compensation and stock-based payment accounting under IFRS and US GAAP.
HR and Compensation Analysts: Professionals involved in employee compensation planning and management, seeking to understand the financial implications of stock-based compensation.
Business Students: Undergraduate or graduate students studying accounting, finance, or economics who want to specialize in topics related to employee compensation and financial reporting.
CFOs and Financial Managers: Individuals responsible for managing or overseeing financial statements and compliance, who want a deeper understanding of deferred tax implications and compensation reporting.
Corporate Executives: Senior executives, particularly those in HR and finance, who need to understand the impact of compensation structures on financial statements and tax liabilities.
Investors and Analysts: Investors who want to analyze employee compensation packages, stock options, and their effects on company performance and financial statements.
Anyone Interested in Stock-Based Compensation: Anyone keen to learn about the accounting and financial reporting for stock-based payments, including differences between IFRS and US GAAP.

Course Curriculum

Economics

Introduction to Employee Compensation

Employee Compensation and Financial Reporting

Finance

April 28, 2025