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FASB issues ASU on share-based payments

  • FASB document Image

Mar 30, 2016

The FASB has issued Accounting Standards Update (ASU) No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” as part of its simplification initiative.

The ASU simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the following:

  • Accounting for income taxes.
  • Classification of excess tax benefits on the statement of cash flows.
  • Forfeitures.
  • Statutory tax withholding requirements.
  • Classification of awards as either equity or liabilities.
  • Classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes.

The ASU also contains guidance under which nonpublic entities can use the simplified method to estimate the expected term of an award and make a one-time election to switch from fair value measurement to intrinsic value measurement for liability-classified awards.

For more in­for­ma­tion, see Deloitte's related Heads Up newsletter as well as the press release and ASU on the FASB’s Web site.

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