Share-based payment private company practical expedient
Defining Issues | October 2021
FASB finalizes a practical expedient for nonpublic entities valuing share-based payment awards.
Share
The ASU provides a share-based payment practical expedient for equity-classified awards.
Applicability
- Nonpublic entities that provide share-based payment awards to employees and nonemployees
Relevant dates
- October 25, 2021 – FASB issued final ASU
| Effective dates | Private companies |
|---|---|
Annual periods – Fiscal years beginning after | Dec. 15, 2021 |
Interim periods – In fiscal years beginning after | Dec. 15, 2022 |
Early application allowed? | Yes, for interim or annual financial statements that have not been issued (or made available for issuance)
|
Key Impacts:
- The FASB has provided a practical expedient that allows a private company to determine, for equity-classified share-based payment awards, the share price for restricted stock awards and the current price input for option-based awards, using a ‘reasonable application of a reasonable valuation method’.
- The practical expedient does not change the measurement objective of ASC 718.
Report contents
- Applicability
- Fast facts, impacts, actions
- Background
- Share price practical expedient for equity-classified awards
- Effective dates and transition
Download the document:
Private Companies
Download PDFExplore more
Resource
Handbook: Share-based payment
Latest edition: KPMG explains in-depth the accounting under ASC 718.
Share-based compensation
Expenses
Discussion and analysis of significant issues related to accounting for expenses.
Meet our team
Regina Croucher
Partner, Dept. of Professional Practice, Head of International Activities, KPMG US
Regina Croucher
Partner, Dept. of Professional Practice, Head of International Activities, KPMG US