Amendments have been proposed concerning share-based payment awards. The Financial Accounting Standards Board issued the proposed Accounting Standards Update, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting, which offers guidance on certain changes to the terms or conditions of a business’ share-based payment that require the application of modification accounting under Topic 718. A business must account for the impact of a modification, unless the fair value, vesting conditions, and classification of the award all stay the same immediately prior to and after the modification.
The disclosure requirements under Topic 718 would apply regardless when a company must apply modification accounting under the proposed changes. If approved, the amendments would be applied prospectively to share-based awards modified on or after the effective date.
Comments on the proposal are due Friday, January 6.