Deloitte
Accounting Research Tool
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Chapter 9 — Nonemployee Awards

9.1 Overview

9.1 Overview

ASC 718-10
General
05-1 The Compensation — Stock Compensation Topic provides guidance on share-based payment transactions. This Topic includes the following Subtopics:
  1. Overall
  2. Awards Classified as Equity
  3. Awards Classified as Liabilities
  4. Employee Stock Ownership Plans
  5. Employee Stock Purchase Plans
  6. Income Taxes.
05-2 This Topic provides guidance for employee and nonemployee share-based payment transactions.
05-3 This Subtopic provides general guidance related to share-based payment arrangements. This Subtopic and Subtopics 718-20 and 718-30 are interrelated and the required guidance may be located in either this Subtopic or one of the other Subtopics. In general, material that relates to both equity and liability instruments is included in this Subtopic, while material more specifically related to either equity or liability instruments is included in their respective Subtopics. Guidance referencing grantees is intended to be applicable to recipients of both employee and nonemployee awards, and guidance referencing employees or nonemployees is only applicable to those specific types of awards.
General
10-1 The objective of accounting for transactions under share-based payment arrangements is to recognize in the financial statements the goods or services received in exchange for equity instruments granted or liabilities incurred and the related cost to the entity as those goods or services are received. This Topic uses the terms compensation and payment in their broadest senses to refer to the consideration paid for goods or services or the consideration paid to a customer.
10-2 This Topic requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. This Topic establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions except for equity instruments held by employee stock ownership plans.