Modelling Stock-Settled Restricted Stock Unit Expense in EXCEL

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Product Details
Course Type: PDF & EXCEL download
Files Included: 1 PDF & 1 worksheet

About the Course

The course begins with a description of what a restricted stock unit is and what its fair value is in terms of IFRS 2 based on stock or cash settlement. It differentiates between the value of an RSU from the company’s perspective and the value to an employee.

This is followed by a step-by-step walkthrough of valuing a stock-settled RSU with certain service and market vesting conditions for determining the expense for accounting disclosure purposes. This entails:

  • Simulating the price of the underlying stock using a Monte Carlo Simulator both for normal and antithetic scenarios
  • Factoring the market condition into the model at each future point in time
  • Assessing the likelihood of meeting the market condition
  • Factoring in forfeitures
  • For each trigger event, determining of probabilities of termination and vesting
  • Calculating the Total Expected Cost for the RSU
  • Calculating the cumulative RSU expense from grant date to valuation date

Learning Objectives

After taking this course you will be able to:

  • Simulate price of a stock using the Black Scholes Merton Terminal Price formula
  • Build a model to factor in market conditions and forfeitures
  • Calculate expense for a stock settlement RSU that depends on satisfying both service & market conditions.


The candidate should be comfortable with basic mathematics, statistics, probability, EXCEL and some familiarity with basic derivatives pricing.

Target Audience

This course is for practitioners in the finance & accounting fields as well as those valuing employee equity compensation programs.

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