FASB Directs Staff to Draft a Final Accounting Standards Updateon Employee Share-Based Payment Accounting Improvements

The Financial Accounting Standards Board (FASB) on November 23, 2015 directed its staff to draft a final Accounting Standards Update (ASU) for vote by written ballot on its narrow-scope fast-track project to improve and simplify accounting for stock compensation under FASB Accounting Standards Codification (ASC) Topic 718. The FASB completed deliberations on the project after considering feedback received during the public comment period in response to the proposed ASU released earlier this summer.

For public companies, the final ASU would be effective for annual reporting periods and interim periods within that reporting period beginning after December 15, 2016 (2017 financial statements for calendar year companies). For nonpublic companies, the final ASU would be effective for annual reporting periods beginning after December 15, 2017 (2018 financial statements for calendar year companies), and interim periods within annual periods beginning after December 15, 2018 (2019 quarterly statements for calendar year companies).

The topics for improvement and simplification were identified during outreach efforts by the FASB staff as well as the Financial Accounting Foundation’s (FAF) post-implementation review of the overall effectiveness of ASC Topic 718. The final ASU would amend Topic 718 in the following eight areas…