FASB decides to stick with FAS 123 measurements for stock options
15 May 2003
Like IASB, FASB is considering share-based compensation.
While both boards have concluded that compensation cost should be recognised over the service period, the measurement technique proposed by the IASB in ED 2 (units-of-service attribution method) differs from the modified grant-date measurement approach in FASB Statement 123. The FASB has now considered both approaches and has decided to keep the FAS 123 method:
"Compensation cost would be adjusted to reflect actual forfeitures and outcomes of performance conditions. The method of attribution would be consistent with the approach presented in Statement 123 rather than by the units-of-service attribution method proposed in IASB Exposure Draft 2, Share-based Payment. For awards with service conditions, an enterprise would base accruals of compensation cost on the best available estimate of the number of equity instruments that are expected to vest and to revise that estimate, if necessary, if subsequent information indicates that actual forfeitures are likely to differ from initial estimates." |