FASB updates guidance on share-based consideration

FASB published an Accounting Standards Update (ASU) that provides guidance for share-based consideration payable to a customer in conjunction with selling goods or services.

The changes address the intersection of the requirements of FASB ASC Topic 606, Revenue From Contracts With Customers, and Topic 718, Compensation — Stock Compensation.

The amendments affect the timing of revenue recognition for entities that offer to pay share-based consideration (e.g., equity instruments) to a customer (or to other parties that purchase the entity’s goods or services from the customer) to incentivize the customer (or its customers) to purchase its goods and services. Specifically, the amendments clarify the requirements for share-based consideration payable to a customer that vests upon the customer purchasing a specified volume or monetary amount of goods and services from the entity.

The ASU is effective for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after Dec. 15, 2026. Early adoption is permitted.

FASB offers update for private companies and not-for-profits

Registration is open for a May 29 webinar during which FASB will provide a semiannual update on standard-setting activities pertaining to private companies and not-for-profit organizations.

Those attending the live broadcast of “FASB Update for Private Companies and Not-for-Profit Organizations” will be eligible for up to 2.5 hours of CPE. Attendance will be limited to the first 1,000 individuals who log on for the webinar (note: CPE is not available for group viewing).

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.