News Column

Post-Implementation Review Concludes Share-Based Payment Standard Achieves Purpose

September 6, 2014



By a News Reporter-Staff News Editor at Investment Weekly News -- A 2004 accounting standard that addresses companies' share-based payment transactions achieves its purpose and provides useful information to users of financial statements.

That was the central conclusion of the post-implementation review (PIR) of Financial Accounting Standards Board (FASB) Statement No. 123, Share-Based Payment. Statement 123 focuses on accounting for transactions in which a public or private company exchanges its equity instruments for employee services. It also addresses transactions in which a company incurs liabilities in exchange for goods or services that are based on the fair value of its equity instruments, or that may be settled by the issuance of those equity instruments.

"The post-implementation review report on Statement 123 identified many positive aspects of the share-based payment standard, including its usefulness to investors," said FASB Chairman Russell G. Golden. "Private company stakeholders told the PIR team that the standard is sometimes difficult to understand and costly to apply. This feedback is consistent with input the FASB recently received from stakeholders through outreach for the FASB's Simplification Initiative and for pre-agenda research for the Private Company Council (PCC).

"Although we do not plan to undertake a comprehensive review of the standard, we will continue our outreach to stakeholders to identify improvements to account for share-based payment transactions. The FASB staff will bring the results of the outreach to the Board and the PCC later this year for discussion," Golden said.

Keywords for this news article include: Banking and Finance, Finance and Investment, Financial Service Companies, Financial Accounting Standards Board.

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Source: Investment Weekly News


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