Offering the option of using a simplified calculation of what is called the opening additional paid-in capital (APIC) pool, the document would help companies shift toward use of the new standard on employee share-based payment. The finalized guidance should be available within the next week, FASB said.
FASB members have noted that firms should have been keeping track of income tax effects for some 10 years, as called for in disclosure requirements of Statement No.123, the non-expensing predecessor to the new standard..
All public companies must begin reporting under those equity compensation disclosure rules by January 1 2006 (See SEC Makes it Official: FASB 123 Implementation Date Moved Back Again ).
At their meeting earlier this month, board members decided :
- The transition provisions in the final expensing rules will be modified so that entities that have already adopted Statement 123(R) would be able to apply to the final rules, once they have been issued, in the earliest reporting period for which financial statements or interim reports have not been issued.
- communication of specific performance targets is consistent with the principles of mutual understanding included in the definition of grant date in Statement 123(R).
- Explicit modification guidance regarding changes in the key terms and conditions of an award subsequent to the criteria (that is, a grant date) would not be added to the final rules.
The board also issued guidance relating to share grant date.