FASB Provides Relief on Issue of "Grant Date" for Equity Compensation
On September 16, FASB released a proposed Staff Position that would provide relief to companies on the application of "grant date" as defined in FAS 123(R). The grant date is the date as of which compensation cost for a stock option or other equity compensation is measured. The proposed FSP would reverse the FASB staff's view that the grant date does not occur until the material terms of an equity grant are actually communicated to the employee. As many are aware, that view was a dramatic departure from historical accounting practices and would mean an added administrative burden for most companies. Under the proposed FSP, however, companies can continue to treat the plan administrator's approval date as an award's grant date if both of the following conditions are met:
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