1.3 Scope

ASC 718 generally applies to share-based payments (1) granted to employees or nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations or (2) provided as consideration payable to customers of the entity.3 Further, an entity acquires goods or services or provides consideration payable to customers by either (1) issuing (or offering to issue) the entity’s equity shares, share options, or other equity instruments or (2) incurring liabilities that are based, at least in part, on the price of the entity’s equity shares or other equity instruments or that require or may require settlement by issuing the entity’s equity shares or other equity instruments. See Chapter 2 for a more detailed discussion of the scope of ASC 718.