Fasb Asc 718-10 Codification Case

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Codification Research Case The authoritative literature that addresses the accounting for share-based payment compensation plans is elaborated in the FASB Codification at FASB ASC 718-10 The objectives for the accounting for stock compensation is mentioned in the FASB ASC 718-10-10.
According to the FASB ASC 718-10-10: 10-1 The objectives of accounting for transactions under share-based payment arrangements with employees is to recognize in the financial statements the employee goods or services received in exchange for equity instruments issued granted or liabilities incurred and the related cost to the entity as those goods or services are consumed. This topic uses the terms compensation and payment in their broadest sense …show more content…
Note that a transaction subject to an employee share-purchase plan that involves a class of equity shares designed exclusively for and held only by current or former employees or their beneficiaries may be compensatory depending on the terms of the arrangement.
(b) Any purchase discount from the market price does not exceed the per-share amount of share issuance costs that would have been incurred to raise a significant amount of capital by a public offering. A purchase discount of 5 percent or less from the market price shall be considered to comply with this condition without further justification. A purchase discount greater than 5 percent that cannot be justified under this condition results in compensation cost for the entire amount of the discount. Note that an entity that justifies a purchase discount in excess of 5 percent shall reassess at least annually, and no later than the first share purchase offer during the fiscal year, whether it can continue to justify that discount pursuant to this …show more content…
For equity-settled share-based payment transactions, the entity shall measure the goods or services received, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If the entity cannot estimate reliably the fair value of the goods or services received, the entity shall measure their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted (par. 10). To apply the requirements of paragraph 10 to transactions with employees and others providing similar services,† the entity shall measure the fair value of the services received by reference to the fair value of the equity instruments granted, because typically it is not possible to estimate reliably the fair value of the services received, as explained in paragraph 12. The fair value of those equity instruments shall be measured at grant date (par.
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