Learn from the experience of early adopters as you gear up for the new guidance.
ASU 2016-09 is FASB’s first significant revision to ASC 718 in 10 years. It affects the way stock compensation is handled across several organizational functions.
The biggest changes? Elimination of the APIC pool, flexibility on using a forfeiture rate, removal of excess benefits from the ASC 260 diluted EPS calculation, and relaxation of tax withholding rules. All these and more present new complexity and opportunity.
How We Help
We can help you to:
- Understand the implications of ASU 2016-09 and coordinate adoption
- Model forfeiture rates and excess tax benefits to help you decide whether to early-adopt ASU 2016-09
- Implement tax settlement forecasting procedures to quantify the P&L and effective tax rate impact of future windfalls and deficiencies across various stock price and other scenarios
- Implement cash burn forecasting procedures to anticipate cash outlays associated with higher withholding levels
- Backtest the dilutive shares impact of removing excess tax benefits from the ASC 260 treasury stock method
- Backtest expense volatility and forecasting variance materiality from eliminating forfeiture rates
- Calculate adoption adjustments, such as the one-time true-ups associated with removing a forfeiture rate
- Understand best practices regarding share withholding policy revisions
ASU 2016-09 Library
Browse our publications on FASB’s ASC 718 updates, all in one place.