Financial Intelligence provides expense forecasts for outstanding options and restricted stock as well as for awards that are expected to be granted in the future. Our flexible forecasting model applies assumed fair values for all future grants and expected forfeiture rates may be changed for each forecasted period. For those grants with custom expensing, we extend the expensing solution into the forecasting model.
We use the same forecasting data for dilution forecasting using the Treasury Stock Method. Our dilution forecasting model accepts assumed fair values for each period being forecasted. Restricted stock settlements are based on vest schedules and option exercises and expirations are based on historical data taken from the previous 12-month period.
Our forecasts accurately provide guidance to our clients about their future period expenses and dilution. We know that forecasts are estimates of future events and they cannot perfectly align with actual results.
Accordingly we provide comprehensive expense analyses for current to prior period, prior forecast to current period, and current period to forecasts. Our clients find that these analyses are essential for their important management reporting requirements.