On March 4 the Financial Accounting Standards Board issued a draft proposal ASU 2019-400: Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) that modifies ASU 2018-07: Compensation - Stock Compensation (718): Improvements to Nonemployee Share-Based Payment Accounting and is intended to further improve upon the measurement and recording of share-based compensation awarded to customers in conjunction with selling goods or services.
Under the current guidance of ASU 2018-07, share-based payments awarded to customers in conjunction with selling goods or services should be accounted for under Topic 606: Revenue from Contracts with Customers. As a result, diversity in practical application became apparent due to lack of specific guidance in this area under Topic 606 as entities may apply either noncash consideration guidance under Topic 606 (measure at contract inception) or Topic 718 (measure at grant date).
This proposal would require entities to measure and classify share-based payments at fair value on the grant date, in accordance with Topic 718: Stock Based Compensation. After the grant date, subsequent measurement and classification of the share-based payments would be subject to Topic 718 unless the payment award is subsequently modified and the grantee is no longer a customer. This ASU would affect all entities that fall under Topic 606 that issue share-based payments to customers.
The draft will undergo a period of public review for further considerations before final publication. Comments on the working draft are due April 18, 2019. For more information contact us in one of our many locations.
Wednesday August 14 2019 | 4:30PM—6:30PM
Office Evolution | 455 E W Eisenhower Pkwy | Ann Arbor, MI 48108
Wednesday August 21 2019 | 4:30PM—6:30PM
Scarab Club | 217 Farnsworth Street | Detroit, MI 48202
You're Invited! Annual Not-For-Profit Accounting Update
Thursday, September 26, 2019
Hosted at Detroit Historical Museum
Save The Date!
Middle Market Manufacturing Outlook
Wednesday, October 23
Hosted at the Detriot Athletic Club
7:30 AM - 11:30 AM