- US GAAP
This Roadmap provides Deloitte’s insights into and interpretations of the guidance on share-based payment arrangements in ASC 718 related to employee and nonemployee awards and in other literature (e.g., ASC 260 and ASC 805).
The 2022 edition reflects the issuance of ASU 2021-07 and SAB 120, which are briefly summarized below. Also new to this year’s update are several short videos that highlight certain aspects of the accounting for share-based payments. Appendix E describes all new content in the Roadmap as well as any substantive revisions to previous content.
In October 2021, the FASB issued ASU 2021-07, which allows nonpublic entities to use, as a practical expedient, “the reasonable application of a reasonable valuation method” to determine the current price input of equity-classified share-based payment awards issued to both employees and nonemployees. Section 126.96.36.199 provides additional details about the ASU.
The following month, the SEC staff issued SAB 120, which provides the staff’s views on the measurement and disclosure of certain share-based payment awards granted when entities possess positive material nonpublic information (i.e., “spring-loaded” awards). Under SAB 120, an entity that grants a share-based payment award while in possession of positive material nonpublic information should consider whether adjustments to the following are appropriate when determining the fair-value-based measure of the award: (1) the current price of the underlying share or (2) the expected volatility of the price of the underlying share for the expected term of the share-based payment award. For more information about SAB 120, see Section 4.9.2.