FASB adds to its agenda a project on improving nonemployee share-based payment accounting

Published on: 16 Dec 2015

At its meeting today, the FASB decided to add to its agenda a project on improving the accounting for nonemployee share-based payment arrangements. When the Board previously deliberated its overall share-based payment simplification project, it decided that potential improvements to the nonemployee model could involve broader changes and take longer to complete than other simplification projects. As a result, the Board concluded that reconsideration of the accounting for nonemployee share-based payments should be moved to a separate research project.

At the meeting, the FASB staff summarized the differences between the accounting for nonemployee awards and employee awards, including differences related to the accounting for performance conditions, and presented three alternatives for potential consideration:

  • Alternative A — Align nonemployee and employee accounting for unresolved performance conditions.
  • Alternative B — Expand the scope of ASC 7181 to include share-based payment transactions with nonemployees who provide services that are similar to those provided by employees.
  • Alternative C — Expand the scope of ASC 718 to include all share-based payment transactions related to acquiring goods or services with nonemployees.

Board members expressed preferences for alternatives B and C, and directed the FASB staff to perform additional research.


1 FASB Accounting Standards Codification Topic 718, Compensation — Stock Compensation.

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