Deloitte
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Chapter 6 — Modifications

6.12 Modifications That Change the Scope of Awards

6.12 Modifications That Change the Scope of Awards

An entity may modify or settle a liability to a grantee that is not subject to the provisions of ASC 718 by issuing awards that are subject to ASC 718 (e.g., stock options are granted in place of a cash-based profit-sharing arrangement). If a liability that was not initially within the scope of ASC 718 is modified or settled through the issuance of a new instrument that is within the scope of ASC 718, the entity should account for the transaction, as well as the new award, under ASC 718.