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FASB Issues Guidance on Nonemployee Share-Based Payments

The Financial Accounting Standards Board (“FASB”) has issued new guidance aimed to lower costs and improve financial reporting related to nonemployee share-based payments. Accounting Standards Update (“ASU”) No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, expands on Topic 718, Compensation—Stock Compensation to comprise of share-based payments issued to nonemployees and aligns the accounting of share-based payments to nonemployees and employees. The new standard also replaces Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The guidance under ASU No. 2018-07 is effective for public companies for fiscal years, as well as interim periods within those years, starting after December. Read More.

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Recap of FASB’s June 15 Meeting

At its Board meeting on June 15, the Financial Accounting Standards Board (“FASB”) reached tentative decisions on the following topics: Accounting for income taxes—intra-entity asset transfers. The FASB will require entities to disclose the income tax consequences of an intra-entity asset transfer, excluding an intra-entity asset transfer of inventory, when the transfer takes place. Current GAAP will also be retained for intra-entity asset transfers of inventory, which requires the disclosure of income tax consequences when an outside party purchases the inventory. Public entities will have to apply the amendments during annual periods, and interim periods within, starting after December 15,. Read More.

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