Deloitte
Accounting Research Tool
...
Chapter 10 — Business Combinations

10.9 Acquiree Awards Remain Outstanding

10.9 Acquiree Awards Remain Outstanding

In some cases, the acquirer is not required to replace the acquiree’s share-based payment awards and they remain outstanding after the acquisition. For example, if the acquiree becomes a subsidiary of the acquirer, the share-based payment awards that were issued by the acquiree before the business combination might remain outstanding after the business combination. In that case, assuming that they qualify for equity classification, we believe that those awards represent a noncontrolling interest in the subsidiary in the parent’s consolidated financial statements. While the guidance in ASC 805-30-30-1(a)(2) states that any noncontrolling interests should be measured and recognized at fair value, we believe that unvested share-based payment awards should be measured in the same manner as replacement awards; that is, a fair-value-based measure is used in accordance with ASC 718.