Effectus Group comments on FASB’s  Proposed Accounting Standards Update, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)

The comment period for the FASB’s proposed accounting standards update on share-based payments to a customer recently closed. In our comment letter, we share our perspective that we generally support the Board’s efforts to clarify the framework of applying ASC 718 to share-based consideration payable to a customer. In our view, a different approach should be taken than the one set forth in the Exposure Draft. In particular, we encouraged the Board to consider keeping the constraint on estimates of variable consideration for share-based consideration payable to a customer as we believe the core principles of revenue recognition should be consistent, regardless of the form of variable consideration issued to customers.

For further perspective on the proposed accounting standard update, please contact Brian Allen at ballen@effectusgroup.com, Keith Ma at keith_ma@effectusgroup.com, or VK Varadha at vk@effectusgroup.com.

View Comment Letter (PDF) >

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