Accounting Implications for Awards with a Change in Control, IPO or Regulatory Approval Provision that Affects Vesting
For many early-stage companies, a change in control, initial public offering (IPO) or regulatory approval is the central target they need to achieve in order to progress. From a share-based payment accounting perspective, the use of these targets has given rise to an important question: Should they be classified as performance conditions or non-vesting conditions?
On March 13, 2014, the Emerging Issues Task Force (EITF) reached a concensus that these types of performance targets should be treated as performance conditions that affect the vesting of an award.
This Equity Methods Issue Brief discusses the accounting implications for awards with a change in control, IPO, or regulatory approval provision that affects vesting in light of the EITF’s recent decision.
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