Section 3870 - Stock-based compensation and other stock-based payments

Effective date:

January 1, 2011

Published by the AcSB:

December 2009

Reach out to our Section 3870 Specialist

Nick Capanna


This Section establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services. It applies to transactions, including non-reciprocal transactions, in which an enterprise grants shares of common stock, stock options, or other equity instruments, or incurs liabilities based on the price of common stock or other equity instruments. These transactions may involve the enterprise's own equity instruments, those of a parent or subsidiary, those of a subsidiary of the same parent, or those of an equity-accounted affiliate of one of the above. This Section sets out a fair value based method of accounting and is required for all stock-based payments.

This Section permits a private enterprise to use an industry index to estimate volatility but does not permit it to use the minimum value method.

History of Section 3870




December 2009

Part II of the CPA Canada Handbook  issued

Effective for fiscal years beginning on or after January 1, 2011.

Note: The above summary does not include details of consequential amendments made as the result of other projects.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.