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FASB improving nonemployee awards accounting

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In an effort to simplify the accounting for share-based payment awards, the FASB recently issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. The amendments expand the scope of ASC 718, Compensation – Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments also supersede the guidance in ASC 505-50, Equity-Based Payments to Non-Employees, which previously included the accounting for nonemployee awards.

This New Developments Summary bulletin explores what is and is not changing for entities that issue awards to nonemployees.