System and method for equity-based compensation accounting

USPTO Application #: 20080183605
Title: System and method for equity-based compensation accounting
Abstract: A
system for employee equity based compensation accounting, comprising a
database for storing granting information derived from one or more
equity based compensation grants to an employee, said database being
configured to have a normalized data structure for storing said
granting information; and a reporting module for generating from said
stored granting information accounting entries corresponding to
plurality of sub ledger accounts, the accounts representing accounting
debits and credits in Agent: Gowling Lafleur Henderson, LLP Suite 2600 - Ottawa, ON, om
Inventor: Ramy R. Taraboulsi
USPTO Applicaton #: 20080183605 - Class: 705 30 (USPTO)

The Patent Description & Claims data below is from USPTO Patent Application 20080183605.

Brief Patent Description - Full Patent Description - Patent Application Claims  

CROSS REFERENCE TO RELATED APPLICATIONS

This application claims the benefit of US Provisional application No. 60/829,150 filed, Oct. 12, 2006.

FIELD OF THE INVENTION

The present invention relates generally to
information processing environments, and more particularly to a system
and method for improving performance of computer implemented systems
for accounting for employee equity based compensation, such as employee
stock option compensation plans.

BACKGROUND OF THE INVENTION

Computer based accounting systems utilize a
relational database and typically use a double entry accounting scheme
to record transaction information where each value is stored twice,
once as a credit (a positive value) against one account, once as a
debit (a negative value) against another account. There are a number of
rules that control these values. The main rules are i) every entry into
the system must balance—i.e. the sum of any transaction must be zero;
ii) the sum of all the values in the system at any one time must be
zero (the ‘trial balance’); iii) no values can ever be amended or
deleted. They must be negated with an opposing entry (a ‘contra’) and
re-entered (‘re-booked’). This provides a completely secure audit trail.

By way of background, the accounting process
maybe defined by a series of activities that begins with a transaction
and ends with the closing of the books. Because this process is
repeated each reporting period, it is referred to as the accounting
cycle and includes major steps of i) Identify the transaction or other
recognizable event; ii) Analyze and classify the transaction—this step
involves quantifying the transaction in monetary terms (e.g. dollars
and cents), identifying the accounts that are affected and whether
those accounts are to be debited or credited; iii) record the
transaction by making entries in the appropriate journal—the journal is
the point of entry of business transactions into the accounting system.
It is a chronological record of the transactions, showing an
explanation of each transaction, the accounts affected, whether those
accounts are increased or decreased, and by what amount; iv) post
general journal entries to the ledger accounts—the ledger is a
collection of the companies accounts. While the journal is organized as
a chronological record of transactions, the ledger is organized by
account and in the double entry system transactions are recorded in at
least two accounts, a typical general journal entry takes the following
form:

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said sub ledger for at least one of issuing,
expensing, exercising and expiring one or more of said equity based
compensation grants. (end of abstract)