Stock Award Modifications Guidance Updated
Guidance has been issued regarding whether the terms and conditions of share-based payments require modification accounting. Last week, Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. The new ASU requires that a modification accounting be applied unless the following conditions are met: The modified award’s fair value is equal to the original award’s fair value The modified award’s vesting conditions is equal to the original award’s vesting conditions The modified award is categorized in the same way as the original award (as either an equity instrument or a liability. Read More.