FASB Proposes Accounting Standards Update to Improve and Simplify Accounting for Stock Compensation under FASB ASC Topic 718

The Financial Accounting Standards Board (FASB) on June 8, 2015 released a proposed Accounting Standards Update (ASU) on its narrow-scope fast-track project to improve and simplify accounting for stock compensation under FASB Accounting Standards Codification (ASC) Topic 718. The proposed ASU is titled “Improvements to Employee Share-Based Payment Accounting” and is now subject to a public comment period that ends on August 14, 2015. The FASB decided to hold off on determining an effective date for the proposed ASU until feedback is received from the comment period.

The topics for improvement and simplification were identified based on recently completed 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 proposed ASU amends Topic 718 in the following eight areas…