Nothing like an inflammatory headline to get your attention. Actually, it's not quite that dramatic, really more like a name change rather than a new accounting standard.
FASB's Codification Project
Under the FASB's Codification project, all current US GAAP has been reorganized into the Accounting Standards Codification. This means that all non-governmental US GAAP--e.g., FASB Statements, FASB Staff Positions, and Emerging Issues Task Force (EITF) Abstracts--are renamed.
The ASC or "Codification," as it's known to FASB hipsters, is divided into five principle areas, with each area divided into Topics, Subtopics, Sections, and Paragraphs. FAS 123(R) as it relates to employees will henceforth (as of September 15) be known as "FASB ASC Topic 718 - Stock Compensation" (under the area of "Expenses"). At least they didn't use the inscrutable "share-based payments" appellation.
Non-employees didn't fare quite so well. 123(R) as it relates to non-employees (which it doesn't, at least not until phase 2--but that's a topic for a future blog, if and when FASB ever gets around to phase 2 of 123(R)) and EITF 96-18 will be "FASB ASC Subtopic 505-50 - Equity-Based Payments to Non-Employees." Not "compensation" and relegated to a mere Subtopic. How disappointing.
Finally Someone Explains It All
I've known this was coming for some time; I've been getting emails from FASB about it that I've been steadfastly ignoring for several years now. Just when it was getting to the point where I thought I was going to have to assign one of my brilliant NASPP staff persons to figure it all out, we got a great memo from Frederic W. Cook & Co. that saves us the trouble.
Only the Names Have Changed
This doesn't change 123(R) or any of the other GAAP relating to stock compensation--there's nothing new and what was there before is all still there. It's just been reorganized--so, theoretically, it's going to be easier to find it all (although, honestly, I didn't feel like the organization was a problem before).
I was concerned that what might be changing was the cost. Right now, 123(R) and most other FASB literature is available free of charge on Fasb.org. Likewise, basic access to the Codification will also be free, although you have to register for it. Which means one more login and password to remember, although at least FASB doesn't have all the crazy password requirements that the SEC imposes for EDGAR. There is a premium access that you can pay for that provides additional search functionalty and other cool-sounding features.
Rearranging the Grocery Store
I feel like this is sort of like what happens when my local grocer rearranges the store. Everything I'm looking for is still there, but it takes me a lot longer to do my shopping because now I can't find any of it.
But then, I'm just a basic user. I suppose if I had a job that required me to spend a lot more time with US GAAP literature, enough that it were worth it to upgrade to the premium membership, I might find all the additional search functionality and fancy tools useful.
NASPP Conference Workshop of the Week
This week's workshop is the double session "How to Implement Responsible Option Exchange Programs and Effectively Administering an Option Exchange Program." "How to Implement Responsible Option Exchange Programs" will consider the corporate governance implications of option exchange programs in light of their alternatives along with how to conduct an exchange responsibly. Our panelists will illustrate how to balance both employee and shareholder interests to arrive at a solution for underwater stock options that is a win-win for all parties. "Effectively Administering an Option Exchange Program" will illustrate how to leverage technology to streamline administration of your own exchange program. You will hear real-world, practical advice on collecting tender offer elections, computing incremental expense, recording new grants and "cancelling" the original grants as our veteran panel discusses the tools available to help you with your exchange, best practices, and traps to avoid.
NASPP "To Do" List
We have so much going on here at the NASPP that it can be hard to keep track of it all, so I keep an ongoing "to do" list for you here in my blog.
- Register for the 17th Annual NASPP Conference.
- Make your hotel reservations for the NASPP Conference (don't delay--the hotel is already close to full on some nights).
- Renew your NASPP membership for 2009 (if you aren't an NASPP member, join today).
- Complete this month's Compliance-O-Meter quiz on Spreadsheet Usage.
- Barbara