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NASPP Essentials

Accounting for Equity Compensation in the United States
Dec 31,2019

Written for readers without an accounting background, this article provides a summary of the treatment of stock compensation under US GAAP. Also includes highlights of differences between the US GAAP and IFRS with respect to stock compensation.

Treatment of Stock Compensation in Diluted Earnings Per Share
Jan 09,2007

This article summarizes how various types of stock awards impact diluted earnings per share and includes several examples.

Latest Developments

Corporate earnings guidance impacted by new stock compensation rules
Mar 30,2017

In 2016, the FASB issued Accounting Standard Update (‘ASU’) 2016-09, Improvements to Employee Share-Based Payment Accounting, which makes a number of changes meant to simplify and improve accounting for share-based payments. One of the most significant changes relates to accounting for tax deductions associated with stock compensation, and will now result in all tax benefits being reflected in corporate earnings. This article examines what companies will need to consider in applying these changes.

Performance Shares and Diluted Earnings Per Share
Oct 31,2019

This article by Infinite Equity explains how performance awards are included in diluted earnings per share.

The Two-Class Stock Method for Calculating Earnings per Share
Aug 31,2012

Earnings per share (EPS) is one of the most common and complex performance measurements that a publicly held company presents in its quarterly and annual reports. (See Josef Rashty and John O’Shaughnessy, “Restricted Stock Unites and the Calculation of Basic and Diluted Earnings per Share,” The CPA Journal, June 2011, pp. 40–45.) Accounting Standards Codification (ASC) Topic 260, “Earnings per Share,” covers guidance for the calculation and presentation of basic and diluted EPS, and ASC Topic 718, “Compensation—Stock Compensation,” provides guidance for certain unique characteristics of stock compensation awards that impact the EPS calculation.

Employee Stock Purchase Plans and the Calculation of Basic and Diluted Earnings per Share
May 31,2012

Earnings per share (EPS) is the most common and complex performance measurement that a publicly held company presents in its quarterly and annual reports (Josef Rashty and John O’Shaughnessy, “Restricted Stock Units and the Calculation of Basic and Diluted Earnings per Share,” The CPA Journal, June 2011, pp. 40–45). Guidance for calculating and reporting EPS can be found in two parts of the Accounting Standards Codification (ASC): Topic 260, “Earnings per Share,” which provides for the calculation and presentation of the basic and diluted EPS, and Topic 718, “Compensation—Stock Compensation,” which provides for certain unique characteristics of stock compensation that impact the EPS calculation.

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NASPP Blog

Update to ASC 718: Diluted EPS
Feb 09,2016
Barbara Baksa

Update to ASC 718: Diluted EPS

Weighted Averages and Equity Compensation
Oct 05,2010
Robyn Shutak

Weighted Averages and Equity Compensation

Webcasts

The Rules Are In! ASC 718 Simplified...Sort Of?
Jan 24,2017

How will ASU 2016-09 change your equity accounting?

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