What accounting standard does Amerispec Inspection Services use for stock-based awards?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
ompany had issued and outstanding 29,669 and 29,200 Class A Units, respectively. Each Class A Unit has one voting right and all distributions will be made pro rata commensurate with each members' ownership interest. Class B Units issued with the equity incentive plan are nonvoting.
Equity Incentive Plan
The Company accounts for stock-based awards in accordance with ASC 718 - Stock Compensation ("ASC 718"). ASC 718 requires compensation costs related to share-based payments, including profits interest units ("Units") and other equity awards, to be measured based on the grant date fair value of the award.
The Company issued certain time and performance vesting Units pursuant to the TCB Services Management, LLC Equity Incentive Plan (the "Equity Plan"). The Company has accounted for the Units within its consolidated financial statements as the Unit holders are providing services directly related to the Company and its subsidiaries. The aggregate number of units that may be issued or transferred under the Equity Plan is 2,000 Units. Units granted under the plan have been allocated into two groups based on their vesting criteria: time vesting and performance vesting Units.
Time vesting Units are equity classified awards, vest over a 5-year period and will vest 20% on each anniversary date of the date of grant. The Company recognizes compensation expense over a straight-line period of 5 years and has recorded compensation expense of approximately $96,000 and $51,000 for the year ended December 31, 2024 and period ended December 31, 2023. This expense is included in Salaries and wages on the statements of comprehensive loss.
Performance vesting Units are equity classified awards, and vest subject to a liquidation event in which a return amount greater than two times is achieved by the equity
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to the 2025 FDD, Amerispec Inspection Services accounts for stock-based awards in accordance with ASC 718 - Stock Compensation. This standard requires that compensation costs related to share-based payments, including profits interest units and other equity awards, be measured based on the grant date fair value of the award.
Amerispec Inspection Services issued certain time and performance vesting Units pursuant to the TCB Services Management, LLC Equity Incentive Plan. The company accounts for these Units within its consolidated financial statements because the Unit holders provide services directly related to the company and its subsidiaries. The aggregate number of units that may be issued or transferred under the Equity Plan is 2,000 Units, allocated into time vesting and performance vesting Units based on their vesting criteria.
Time vesting Units are equity classified awards that vest over a 5-year period, with 20% vesting on each anniversary of the grant date. Amerispec Inspection Services recognizes compensation expense over a straight-line period of 5 years, recording approximately $96,000 and $51,000 for the years ended December 31, 2024, and December 31, 2023, respectively. This expense is included in Salaries and wages on the statements of comprehensive loss. Performance vesting Units are equity classified awards that vest subject to a liquidation event in which a return amount greater than two times is achieved by the equity holders, provided the participant's continuous service has not terminated prior to such vesting date. As a liquidation event was not considered probable as of December 31, 2024 and 2023, no compensation expense has been recorded based on this criterion.