FASB Releases ASU on Profits Interest Awards

The FASB has issued Accounting Standards Update (ASU) No. 2024-01, Scope Application of Profits Interest and Similar Awards. The ASU clarifies how an entity determineswhether a profits interest or similar award is (1) within the scope of ASC 718 or (2) not a share-based payment arrangement and therefore within the scope of other guidance. The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or nonemployees in exchange for goods or services.

For more information, see the press release on the FASB’s Web site.