Deloitte
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Chapter 14 — Accounting for Share-Based Payments Issued as Sales Incentives to Customers

14.1 Background

14.1 Background

The scope of ASC 718 does not include the recognition of share-based payments issued to a customer that (1) are not in exchange for a distinct good or service or (2) are in exchange for a distinct good or service but can result in a reduction of the transaction price in accordance with ASC 606-10-32-26 (i.e., “share-based consideration payable to a customer”). Such recognition must be accounted for under ASC 606 (i.e., as a reduction of revenue). However, the measurement (and measurement date) of share-based consideration payable to a customer and its classification are subject to the guidance in ASC 718.