IMA Financial Reporting Committee comment letter on Proposed Accounting Standards Update No. 2019-400, Compensation−Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)
Thursday, April 18, 2019
The IMA Financial Reporting Committee (FRC) issued a comment letter in response to Proposed Accounting Standards Update (ASU) No. 2019-400, Compensation−Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). In this release, the FASB seeks input on amending the guidance regarding the date on which companies measure share-based consideration promised to a customer as part of a revenue arrangement. Under these amendments, if adopted, entities would apply the guidance in Topic 718, which requires measurement of share-based consideration at fair value on the grant date, the date when the grantor (vendor) and grantee (customer) come to mutual understanding about the key terms of the share-based award. This proposal follows recent amendments in ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting, which made Topic 718 applicable to nonemployee share-based compensation.
In its response, the FRC supports the proposed ASU because it promotes consistency in the date on which companies measure the fair value of share-based consideration granted to employees, nonemployees, and customers.
The IMA Financial Reporting Committee (FRC) issued a comment letter in response to Proposed Accounting Standards Update (ASU) No. 2019-400, Compensation−Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). In this release, the FASB seeks input on amending the guidance regarding the date on which companies measure share-based consideration promised to a customer as part of a revenue arrangement. Under these amendments, if adopted, entities would apply the guidance in Topic 718, which requires measurement of share-based consideration at fair value on the grant date, the date when the grantor (vendor) and grantee (customer) come to mutual understanding about the key terms of the share-based award. This proposal follows recent amendments in ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting, which made Topic 718 applicable to nonemployee share-based compensation.
In its response, the FRC supports the proposed ASU because it promotes consistency in the date on which companies measure the fair value of share-based consideration granted to employees, nonemployees, and customers.
