The FASB proposed an accounting standards update on Monday, Sept. 30, to clarify guidance on share-based payments granted by entities as consideration payable to customers.
In June, the board added a project to its technical agenda to improve accounting guidance under Topic 606, Revenue from Contracts with Customers, and Topic 718, Compensation—Stock Compensation, for share-based payments made in conjunction with selling goods or services.
FASB said it expects the proposed changes to improve financial reporting results by requiring revenue estimates to more closely reflect an entity’s expectations.
The changes would also enhance comparability and better align the requirements for share-based consideration payable to a customer with the principles in Topic 606.
Public comments on the proposal are due by Thursday, Nov. 14. To submit your comments, see the instructions listed in the proposed update.