Share-based payments: navigating ASC 718

The overarching principle of ASC 718, which codifies the FASB’s guidance on accounting for share-based arrangements, is to account for the fair value of both employee and nonemployee awards as compensation expense in the financial statements. Our updated, comprehensive 2024 version of Share-based payments: Navigating the guidance in ASC 718  provides guidance, examples, and insights on all aspects of accounting for share-based payments under ASC 718, including scope, classification, measurement, expense attribution, modification accounting, disclosure, and more.

The 2024 edition of our guide reflects recent amendments made by the FASB and the SEC that impact the accounting for share-based payment awards, including:

• The amendments in FASB ASU 2021-07, which revise ASC 718 to allow a nonpublic entity to use a practical expedient to determine the current-price input of an equity-classified share-based payment award when measuring the fair value of the award; and   
• Staff Accounting Bulletin (SAB) 120, issued by the staffs’ of the SEC’s Office of the Chief Accountant and the Division of Corporation Finance, which provides accounting and disclosure guidance for “spring-loaded awards” made to executives. “Spring-loaded awards” are share-based compensation awards granted to executives shortly before an entity announces market-moving information, such as an earnings release with better-than-expected results or a new material customer contract.

Download the 2024 version of Share-based payments: Navigating the guidance in ASC 718.