By Denise LugoThe Financial Accounting Standards Board voted to issue a proposed accounting standard update to improve the accounting for employee share-based payment awards for both public and private companies.The proposal will be issued early in the second quarter with a 60-day comment period, according to FASB discussions Feb. 4.By 4-3 majority, FASB decided to hold off on determining an effective date until receiving comments on the proposal.“It's a potpourri of all these different sets of issues,” said FASB member Thomas Linsmeier. The board could end up getting “a vastly different set of reaction to some of the issues versus others that could cause redeliberations to be a little less rapid than we've had in some of the simplification projects,” he said.A tentative date floated by staff accountants, however, was that the amendments be effective for fiscal years after Dec. 15, 2016 for public companies, with a one year deferral for private companies.
Eliminate Indefinite Deferral in Topic 718 FASB also voted to eliminate the indefinite deferral in ASC 718, Compensation—Stock Compensation.The decision to eliminate the deferral in Topic 718 won't change U.S. generally accepted accounting principles; it will only remove the guidance that isn't applied in practice because it is indefinitely deferred, FASB said.The bulk of the meeting was to determine transition and disclosure requirements for slices of issues in accounting for share-based payments, many of which are tax issues.The meeting was a continuation of the board's Oct. 8, 2014 discussions, which determined the accounting amendments it will propose.Disclosure Requirements Related to disclosures, FASB Feb. 4 decided to require “all applicable disclosures” for an accounting change, except for quantifying the income statement effect of the change in principle in the year of adoption.Standard disclosures would include the nature and reason for the change, said FASB.The standard disclosures would also include a discussion of what prior-period information has been retroactively adjusted, if any, and the cumulative effect of the change on retained earnings, the board agreed.Transition Requirements Related to transition, the board landed on a variety of requirements tailored to fit each issue. Specifically:For the rules on minimum statutory withholding requirements—use modified retrospective application with a cumulative-effect...