FASB Proposes Guidance Related to Profits Interest Awards

The FASB has issued a proposed Accounting Standards Update (ASU), Compensation — Stock Compensation (Topic 718): Scope Application of Profits Interest Awards. The proposal would add an illustrative example “that includes four fact patterns to demonstrate how an entity would apply the scope guidance in paragraph 718-10-15-3 to determine whether a profits interest award should be accounted for in accordance with [ASC] 718.”

Comments on the proposed ASU are due by July 10, 2023. For more information, see the press release on the FASB’s Web site.