Accounting for stock options in a private company is the process of recognizing and documenting the financial transactions related to awarding, granting, exercising, and settling stock options. This includes any activity related to the issuance and vesting of stock options, recording cash (or other) payments due to option holders, as well as adjustments for corporate income taxes. Accounting for stock options can involve complex calculations, which must be performed correctly to ensure that a company’s tax filings are accurate. When done correctly, accounting for stock options helps companies stay organized while still maximizing business opportunities.