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Section 7300: Share-based Payments
[U.S. GAAP Codification Topic]
718 Compensation - stock compensation
718-10 Overall
718-20 Awards classified as equity
718-30 Awards classified as liabilities
718-40 Employee stock ownership plans
718-50 Employee share purchase plans
505-50 Equity-based payments to non-employees
[U.S. GAAP before the Codification]
APB 25, October 1972, Accounting for Stock Issued to Employees, Superseded by SFAS 123(R) in 2004
SFAS 123, October 1995, Accounting for Stock-Based Compensation
SFAS 123(R), December 2004, Share-based Payment
AICPA SOP 93-6, Employers' Accounting for Employee Stock Ownership Plans
FASB Technical Bulletin 97-1, 1997, Accounting under Statement 123 for Certain Employee Stock Purchase Plans with a Look-Back Option
1. Recognition Principle
Recognize when goods and services are received.
2. Classification
(a) Awards classified as equity
(b) Awards classified as liabilities
3. Awards classified as equity
(1) Measurement date: Grant date
(2) Measurement principle
(2a) Employees --> Measured at Fair Value (FV) of Equity Instruments issued
(2b) Nonemployees --> FV of Equity Instruments issued or
--> FV of goods and services if more reliably measured
(3) Compensation costs are recognized over the requisite service period.
4. Awards classified as liabilities
(1) Measurement date: Settlement date
(2) Measurement principle
--> Measured at FV of liabilities
--> Remeasured at each reporting date
--> Until settlement date
(3) Changes in FV of liabilities are recognized as compensation costs
(4) Nonpublic entities have a choice of (4a) or (4b)
(4a) FV of liabilities: preferable
(4b) Intrinsic value
5. If requisite service is rendered, but options are not exercised
--> previously recognized compensation costs are not reversed
6. If performance conditions are satisfied, but market conditions are not satisfied
--> previously recognized compensation costs are not reversed
--> market conditions are not considered as vesting conditions
7. Reload options are not considered in determining the FV at grant date
--> subsequent grant is treated as a separate award
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