Money 5 and 4: How to Track Employer-Offered Stock Options
  
PSS ID Number: Q154332
Article last modified on 02-07-1998
 
4.0 5.0
 
WINDOWS
 

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The information in this article applies to:
 
 - Microsoft Money version 5.0 for Windows 95
 - Microsoft Money version 4.0 for Windows 95
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SUMMARY
=======
 
It is possible to track employer-offered stock options by setting up
separate investment accounts for each grant.
 
MORE INFORMATION
================
 
How to Track Employer-Offered Stock Options
-------------------------------------------
 
1. Make sure you have all your option records available.
 
2. In the Investment Portfolio, click New, and then click A
   new Investment Account.
 
3. Follow the instructions on the screen, and give the account a
   descriptive name, 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.
 
4. When asked if the account has an Associated Cash Account, click
   Yes, and then leave the Opening Balance field blank in the next
   dialog box.
 
5. When you finish creating the account, double-click it in the
   Investment Portfolio.
 
   If you don't see the options account in the list, make sure you've
   chosen Portfolio from the View bar drop-down list.
 
6. Enter a new Buy transaction, using the table below as a guide.
 
   Field              What to Enter
   -----              -------------
 
   Date               The date you were awarded the options
   Investment         The name of the stock
   Activity           Buy
   Quantity           The number of shares in the option grant
   Price              The per-share grant price of the options
   Commission         Zero
   Total              Leave this blank. The total will be calculated
                      automatically.
   Transfer from      Your Associated Cash Account
   Memo               Anything you want.
 
7. Click Enter.
 
8. If you have been granted multiple stock options, repeat steps 2
   through 7 for each grant.
 
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
----
 
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 that have a positive value. Otherwise, if the stock value
has decreased since you were granted it, the option account will show a
negative balance, which is not really accurate (because you are not
obligated to exercise stock options).
 
Exercising 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 below:
 
If You Sell The Option Stock
----------------------------
 
You need to record the sale, and then "reimburse" your records to
account for the exercise price.
 
1. Make sure you have all your option granting and sale records
   available.
 
2. In the Account Register, go to your options account, and enter a
   Sell transaction, using the table below as a guide.
 
   Field           What to Enter
   -----           -------------
 
   Date            The date of the sale
   Investment      The name of the stock
   Activity        Sell
   Quantity        The number of shares exercised
   Price           The per-share sale price
   Commission      Zero
   Total           Leave this blank. The total will be calculated
                   automatically.
   Transfer to     The account in which you deposited the money from
                   the sale.
   Memo            Anything you want
 
3. The account to which you transferred the sale proceeds now contains
   the total sale amount. To subtract the exercise amount, determine the
   amount of cash you spent to exercise the options. You may find this
   on your statement, but you can also calculate it by multiplying the
   quantity of shares by the grant price.
 
4. Go to the account where you deposited the sale's proceeds, and
   enter a transfer to the Associated Cash Account, using the
   following table as a guide.
 
   Field           What to Enter
   -----           -------------
 
   Number          Leave this blank
   From            The account that received the proceeds of the sale
   Date            The date of the sale
   To              The name of the Associated Cash Account
   Amount          The quantity of shares sold times the grant price
   Pay to          Leave this blank
   Memo            Anything you want
 
If You're Keeping the Option Stock
----------------------------------
 
You will want to move the stock from your option account to another
Money account that you use to track stock you own.
 
1. Make sure you have all your option records available.
 
2. In the Account Register, go to your options account and enter a
   Sell transaction for the number of shares you exercised. Choose 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.
 
Additional query words: w_money 4.0 5.0 investments employee purchase
employer options Scuz
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Keywords          : kbhowto kbfaq
Version           : 4.0 5.0
Platform          : WINDOWS
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Copyright Microsoft Corporation 1998.