FASB ISSUES PROPOSED SIMPLIFICATIONS
TO ACCOUNTING FOR NONEMPLOYEE SHARE-BASED PAYMENTS
Norwalk, CT, March 7, 2017—The Financial Accounting Standards Board (FASB)
today issued a proposed Accounting Standards Update (ASU) intended to
reduce cost and complexity and to improve financial reporting for
nonemployee share-based payments. Stakeholders are encouraged to review
and provide comments on the proposal by June 5, 2017.
The proposed ASU would expand the scope of Topic 718, Compensation—Stock Compensation,
which currently only includes payments to employees, to include
payments for goods and services to nonemployees. Consequently, the
accounting for share-based payments to nonemployees and employees would
be similar. The proposed ASU would supersede Subtopic 505-50, Equity—Equity Based Payments to Non-Employees.
The accounting for nonemployee share-based payment transactions was identified as an area for simplification through:
Stakeholders recommended that the FASB improve the accounting for
nonemployee share-based payments to reduce cost and complexity, while
improving the financial reporting for these transactions.
The FASB will determine an effective date after redeliberating input received during the comment period.
More information about the proposed ASU—including a FASB In Focus overview —is available at www.fasb.org.