[header] How to account for deferred compensation [title] Determine the terms of the deferred compensation package. [step] Understanding the structure of the pay package is essential to executing the proper accounting treatment. For example, consider a compensation plan issued in 2015 that will pay out a lump sum of $100 , 000 to an employee in 2020.
[header] How to account for deferred compensation [title] Determine the terms of the deferred compensation package. [step] Understanding the structure of the pay package is essential to executing the proper accounting treatment. For example, consider a compensation plan issued in 2015 that will pay out a lump sum of $100 , 000 to an employee in 2020.
In this case, the purpose of the package would be to give the employee equal benefits. Instead of selecting an equal compensation package, you could take the following consideration. Calculate the agreed terms for the period of time that you will be employed. Review the lease agreements carefully and look for any applicable restrictions and regulations. You need to understand how the deferred compensation package is intended to benefit or negatively impact a person. [substeps] In 2020, for example, retirement contributions to your 401 (k) are fixed until completion. [title] Get the interest rate used for the present value calculation. [step] To calculate the present value, you'll need an interest rate that represents a low-risk investment.