What is the meaning of grant date

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What is the Meaning of Grant Date?

Grant date is the date when an option grant is made to an employee or other recipient. It is the date on which the option grant is made and the recipient is legally entitled to exercise the option. The grant date is important because it marks the beginning of the option vesting period, which is the period of time over which the option can be exercised.

Grant date is also sometimes referred to as the “effective date” of the option grant. This is because the grant date is the date on which the option grant becomes legally effective and the recipient can begin to exercise the option.

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The grant date is important for accounting purposes, as it is used to calculate the fair value of the option grant. The fair value of an option grant is the amount that the option is worth on the grant date. This is important for accounting purposes because the fair value of the option grant is used to calculate the amount of compensation expense that must be recorded in the company’s books.

The grant date is also important for tax purposes. The date of the option grant is used to determine the tax rate that will be applied to the option when it is exercised. The tax rate for options is determined by the date of the grant, not the date of the exercise.

In summary, grant date is the date on which an option grant is made to an employee or other recipient. The grant date is important for accounting and tax purposes, as it is used to calculate the fair value of the option grant and determine the tax rate that will be applied to the option when it is exercised.

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