New Employee Share-Based Payment Accounting Guidance Issued
An Accounting Standards Update (“ASU”) has been issued by the Financial Accounting Standards Board (“FASB”) impacting organizations that distribute share-based payment awards. ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, simplifies certain components of the accounting for share-based payments such as income tax consequences, the classification of awards as either equity or liabilities, and the classification regarding cash flow statements.
For public companies, the amendments in ASU No. 2016-09 are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Private companies must apply the amendments to annual periods beginning after December 15, 2017, and interim periods within such periods beginning after December 15, 2018. Early adoption is permitted.
Complete details on ASU No. 2016-09 are available on the FASB Web site.