Log in or register
Share on LinkedInShare on LinkedIn

ARTICLE · 21 SEPTEMBER 2005

FASB proposes to reverse its position on grant date determination

Cooley LLP
Explore more from Cooley LLP

As reported in a previous Cooley Alert, which requires that the compensation charge for most equity-based awards be measured on the "grant date" of that award, states that a "grant date" occurs when there is a "mutual understanding" of the key terms and conditions of stock awards.

United StatesAccounting and Audit
Daniel Meehan
Daniel Meehan
Buff Miller
Buff Miller
Thomas Reicher
Thomas Reicher
David Walsh
David Walsh
Thomas Welk
Thomas Welk
Author LinkedIn connections

As reported in a previous Cooley Alert, FAS 123(R), which requires that the compensation charge for most equity-based awards be measured on the "grant date" of that award, states that a "grant date" occurs when there is a "mutual understanding" of the key terms and conditions of stock awards. The Financial Accounting Standards Board (FASB) initially took the position that a mutual understanding could not occur until an award’s key terms and conditions were communicated to the employee receiving the award.

In an apparent response to comments and reactions from the business community, the FASB recognized that, "[f]or many preparers, the number and geographic dispersion of employees receiving share-based payment awards limit the ability to communicate with each employee immediately after the awards have been approved by the board of directors (or its equivalent)" and is now seeking to offer a "practical solution."

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

SEC Staff Statement On Fair Value Measurement And Disclosure Considerations For Private Assets

The SEC Staff has issued new guidance addressing fair value measurement and disclosure practices for private credit and other illiquid assets held by registered funds and business development companies. As private credit portfolios have grown nearly 60% since 2020, reaching $270 billion, regulators emphasize the critical importance of robust valuation methodologies, transparent disclosure of significant judgments, and careful application of accounting standards when market prices are unavailable.
United StatesAccounting and Audit
Mayer Brown
Mayer Brown
Article

CAS Board Raises Contract Thresholds To $35 Million And Eliminates CAS 407: What Federal Contractors Need To Know As DoW Demands Cost And Pricing Transparency

The CAS Board has raised contract thresholds to $35 million and eliminated CAS 407, fundamentally changing cost accounting requirements for federal contractors. At the same time, the Department of War is demanding unprecedented cost and pricing transparency through new memoranda requiring actual cost information for negotiations valued at $10 million or more, creating a complex landscape where contractors face fewer formal CAS requirements but heightened scrutiny of their pricing data.
United StatesAccounting and Audit
Bass, Berry & Sims PLC
Bass, Berry & Sims PLC
Article

2026 GAAP Changes: What Your Finance Team Should Address Before Year-End

Finance teams face critical implementation challenges as new GAAP amendments take effect for 2026, requiring immediate attention to accounting policies, documentation standards, and system readiness. Are your financial reporting processes prepared to handle expanded disclosure requirements, CECL practical expedients, and internal-use software accounting changes before year-end audit fieldwork begins?
United StatesAccounting and Audit
MGO CPA LLP
MGO CPA LLP
Article

How OIG Used Data Analytics And Extrapolation In A $12.4 Million Hospital Audit

An HHS Office of Inspector General audit of Methodist Hospital in San Antonio reveals how a review of just 100 claims led to a $12.4 million overpayment recommendation through statistical extrapolation. The audit targeted specific high-risk billing areas including Inpatient Rehabilitation Facility claims, certain diagnosis-related groups, and outpatient billing patterns, uncovering documentation and coding compliance issues that hospital leadership should examine within their own Medicare claims.
United StatesAccounting and Audit
Butler Snow LLP
Butler Snow LLP
Article

SEC Announces Dedicated Financial Reporting And Accounting Unit Within Enforcement Division: Implications For Audit Committees, Boards And Public Companies

The SEC has established a new Financial Reporting and Accounting Unit within its Division of Enforcement, consolidating nationwide resources to investigate public company accounting and financial reporting issues. This organizational shift signals heightened scrutiny of complex accounting matters, non-GAAP measures, and disclosure practices.
United StatesAccounting and Audit
Skadden Arps Slate Meagher & Flom
Skadden Arps Slate Meagher & Flom