Grant Date vs. Service Inception Date Under ASC 718

The growth in the diversity and complexity of performance-based equity awards is giving rise to ongoing challenges in correctly specifying the grant date and service inception date. Errors in specifying either variable directly impact the timing and/or amount of expense recognized.

This issue brief highlights the key guidance in ASC 718 to apply when evaluating a performance-based equity award to determine the grant date(s) and service inception date(s). Using a case-based format, we explain how small details in grant agreements can yield substantially different accounting answers.

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