What it is
A leveraged employee stock ownership plan borrows to buy company stock. As the loan is repaid, shares are released from collateral to participant accounts, and the employer records compensation expense for the shares committed to be released at their fair value on that date.
This workbook amortizes the loan, releases shares under the principal-and-interest or principal-only method, computes the expense from the fair value you enter each period, tracks unreleased shares and estimates the repurchase obligation to vested participants.
When to use it
- When the plan buys shares with a loan and the accounting must be set up.
- At each year end, to support compensation expense, equity and the repurchase obligation.
- When an auditor tests the shares released against the loan payments.
What’s inside
- Plan inputs tab with loan terms, release method and two tie-outs
- Loan schedule for 30 annual periods with payment, interest, principal and shares released
- Compensation expense at fair value per share and unreleased shares
- Repurchase obligation tab with funding coverage and a ten-year distribution schedule
Standard cited
This template follows ASC 718-40. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
What is the difference between the two release methods?
Principal and interest releases shares in proportion to each payment’s share of total payments. Principal only releases them in proportion to principal paid. The plan and the loan agreement set the method.
How is compensation expense measured?
Shares committed to be released multiplied by their fair value on the date they are committed. The fair value per share is an input each period.
Can I use uneven loan payments?
The schedule uses level payments. Overwrite the Payment column with the actual scheduled payments and document the source.
Related templates
- Audit Program: ESOP-Owned Company
- ESOP Valuation Specialist Evaluation Memo
- Debt and Interest Rollforward Schedule
- Equity Rollforward Template (Corporation and LLC)
Last updated 11/05/2026. All free templates.