{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/718/10/#30-initial-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"718","topic_title":"Compensation—Stock Compensation","subtopic":"718-10","subtopic_title":"Overall","section":{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"718-10-30-1","para":"30-1","html":"
While some of the material in this Section was written in terms of awards classified as equity, it applies equally to awards classified as liabilities.
","snippet":"While some of the material in this Section was written in terms of awards classified as equity, it applies equally to awards classified as liabilities.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fae35ab4023dc65d89dd70629a2d1c73daeee37121c914cca219e1c920700329","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:88277d1b8e005102f9a25313f65ecaca1ba67b2f1c8d2941c534ed972a632573","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Fair-Value-Based","paragraphs":[{"citation":"718-10-30-2","para":"30-2","html":"
A share-based payment transaction shall be measured based on the fair value (or in certain situations specified in this Topic, a calculated value or intrinsic value) of the equity instruments issued.
","snippet":"A share-based payment transaction shall be measured based on the fair value (or in certain situations specified in this Topic, a calculated value or intrinsic value) of the equity instruments issued.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9e9e18067a6bc14d849517a674bd3558f0a54c75b0f534597301391aac4c826a","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-3","para":"30-3","html":"
An entity shall account for the compensation cost from share-based payment transactions in accordance with the fair-value-based method set forth in this Topic. That is, the cost of goods obtained or services received in exchange for awards of share-based compensation generally shall be measured based on the grant-date fair value of the equity instruments issued or on the fair value of the liabilities incurred. The cost of goods obtained or services received by an entity as consideration for equity instruments issued or liabilities incurred in share-based compensation transactions shall be measured based on the fair value of the equity instruments issued or the liabilities settled. The portion of the fair value of an instrument attributed to goods obtained or services received is net of any amount that a grantee pays (or becomes obligated to pay) for that instrument when it is granted. For example, if a grantee pays $5 at the grant date for an option with a grant-date fair value of $50, the amount attributed to goods or services provided by the grantee is $45. An entity shall apply the guidance in paragraph 606-10-32-26 when determining the portion of the fair value of an equity instrument attributed to goods obtained or services received from a customer.
","snippet":"An entity shall account for the compensation cost from share-based payment transactions in accordance with the fair-value-based method set forth in this Topic. That is, the cost of goods obtained or services received in …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d95f5fbff2af079dc0a35b2944fe034fdaa1a3e7836aae826eee4bba47cb37cd","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-4","para":"30-4","html":"
However, this Topic provides certain exceptions (see paragraph 718-10-30-21) to that measurement method if it is not possible to reasonably estimate the fair value of an award at the grant date. A nonpublic entity also may choose to measure its liabilities under share-based payment arrangements at intrinsic value (see paragraphs 718-10-30-20 and 718-30-30-2).
","snippet":"However, this Topic provides certain exceptions (see paragraph 718-10-30-21) to that measurement method if it is not possible to reasonably estimate the fair value of an award at the grant date. A nonpublic entity also m…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5dc78715def0e63babc63e50970761cd563fe522f94e539703f393c7094ecd62","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-5","para":"30-5","html":"
The terms of a share-based payment award and any related arrangement affect its value and, except for certain explicitly excluded features, such as a reload feature, shall be reflected in determining the fair value of the equity or liability instruments granted. For example, the fair value of a substantive option structured as the exchange of equity shares for a nonrecourse note will differ depending on whether the grantee is required to pay nonrefundable interest on the note.
","snippet":"The terms of a share-based payment award and any related arrangement affect its value and, except for certain explicitly excluded features, such as a reload feature, shall be reflected in determining the fair value of th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ad6178ce877ccdd0837bbbf8a386ec917684b726ca828cfaf3f19d2167f57355","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:870b435af0729c88c0583143c75c7b419cc1abc5cfddc65433bd7046002082be","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Measurement Objective—Fair Value at Grant Date","paragraphs":[{"citation":"718-10-30-6","para":"30-6","html":"
The measurement objective for equity instruments awarded to grantees is to estimate the fair value at the grant date of the equity instruments that the entity is obligated to issue when grantees have delivered the good or rendered the service and satisfied any other conditions necessary to earn the right to benefit from the instruments (for example, to exercise share options). That estimate is based on the share price and other pertinent factors, such as expected volatility, at the grant date.
","snippet":"The measurement objective for equity instruments awarded to grantees is to estimate the fair value at the grant date of the equity instruments that the entity is obligated to issue when grantees have delivered the good o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8c70fd0b7eacf7ee7921e70535379256678567552a0f4439a8791578ccb747b4","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-7","para":"30-7","html":"
The fair value of an equity share option or similar instrument shall be measured based on the observable market price of an option with the same or similar terms and conditions, if one is available (see paragraph 718-10-55-10).
","snippet":"The fair value of an equity share option or similar instrument shall be measured based on the observable market price of an option with the same or similar terms and conditions, if one is available (see paragraph 718-10-…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a38bf5be0c864db50be178824a52e42fd3d12d05f8af14653537df63909a76a6","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-8","para":"30-8","html":"
Such market prices for equity share options and similar instruments granted in share-based payment transactions are frequently not available; however, they may become so in the future.
","snippet":"Such market prices for equity share options and similar instruments granted in share-based payment transactions are frequently not available; however, they may become so in the future.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:14c7c35688447826e8371984dd94e1d026a149cd88ffab4ffd317f728993052e","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-9","para":"30-9","html":"
As such, the fair value of an equity share option or similar instrument shall be estimated using a valuation technique such as an option-pricing model. For this purpose, a similar instrument is one whose fair value differs from its intrinsic value, that is, an instrument that has time value. For example, a share appreciation right that requires net settlement in equity shares has time value; an equity share does not. Paragraphs
718-10-55-4 through 55-47
provide additional guidance on estimating the fair value of equity instruments, including the factors to be taken into account in estimating the fair value of equity share options or similar instruments as described in paragraphs
718-10-55-21 through 55-22
.
","snippet":"As such, the fair value of an equity share option or similar instrument shall be estimated using a valuation technique such as an option-pricing model. For this purpose, a similar instrument is one whose fair value diffe…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9def8103631ba85642bd85ba7a96aad9d171255d2cd0024282d06c21ca6998f6","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:be5c33e7289ab4979bc497e9bcd5ec29542c787651e13ef1c120533b9f68f4c7","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Factors or Restrictions That Impact the Determination of Fair Value at Grant Date","paragraphs":[{"citation":"718-10-30-10","para":"30-10","html":"
To satisfy the measurement objective in paragraph 718-10-30-6, the restrictions and conditions inherent in equity instruments awarded are treated differently depending on whether they continue in effect after the requisite service period or the nonemployee's vesting period. A restriction that continues in effect after an entity has issued awards, such as the inability to transfer vested equity share options to third parties or the inability to sell vested shares for a period of time, is considered in estimating the fair value of the instruments at the grant date. For equity share options and similar instruments, the effect of nontransferability (and nonhedgeability, which has a similar effect) is taken into account by reflecting the effects of grantees' expected exercise and postvesting termination behavior in estimating fair value (referred to as an option's expected term).
","snippet":"To satisfy the measurement objective in paragraph 718-10-30-6, the restrictions and conditions inherent in equity instruments awarded are treated differently depending on whether they continue in effect after the requisi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:48016ac0fe2d6ca0e26c3c6b62e9670f53b2eeacdf76d3f539e44aaafc5b466f","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-10A","para":"30-10A","html":"
On an award-by-award basis, an entity may elect to use the contractual term as the expected term when estimating the fair value of a nonemployee award to satisfy the measurement objective in paragraph 718-10-30-6. Otherwise, an entity shall apply the guidance in this Topic in estimating the expected term of a nonemployee award, which may result in a term less than the contractual term of the award.
","snippet":"On an award-by-award basis, an entity may elect to use the contractual term as the expected term when estimating the fair value of a nonemployee award to satisfy the measurement objective in paragraph 718-10-30-6. Otherw…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d928f1dedd8d4c81f95b10e57a903c478405298a3487ef9bb4234ae29acef5e3","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-10B","para":"30-10B","html":"
When a nonpublic entity chooses to measure a nonemployee share-based payment award by estimating its expected term and applies the practical expedient in paragraph 718-10-30-20A, it must apply the practical expedient to all nonemployee awards that meet the conditions in paragraph 718-10-30-20B. However, a nonpublic entity may still elect, on an award-by-award basis, to use the contractual term as the expected term as described in paragraph 718-10-30-10A.
","snippet":"When a nonpublic entity chooses to measure a nonemployee share-based payment award by estimating its expected term and applies the practical expedient in paragraph 718-10-30-20A, it must apply the practical expedient to …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c09710a3cbbbe128e1742ed92b41980078d2c723da846aefccc4ec207c7432b2","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-11","para":"30-11","html":"
A restriction that stems from the forfeitability of instruments to which grantees have not yet earned the right, such as the inability either to exercise a nonvested equity share option or to sell nonvested shares, is not reflected in estimating the fair value of the related instruments at the grant date. Instead, those restrictions are taken into account by recognizing compensation cost only for awards for which grantees deliver the good or render the service.
","snippet":"A restriction that stems from the forfeitability of instruments to which grantees have not yet earned the right, such as the inability either to exercise a nonvested equity share option or to sell nonvested shares, is no…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a74a233b03a570306a5b6acf210e3ce23bae28563126e78a6ef0c78bf65deff1","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-12","para":"30-12","html":"
Awards of share-based compensation ordinarily specify a performance condition or a service condition (or both) that must be satisfied for a grantee to earn the right to benefit from the award. No compensation cost is recognized for instruments forfeited because a service condition or a performance condition is not satisfied (for example, instruments for which the good is not delivered or the service is not rendered). Examples 1 through 2 (see paragraphs
718-20-55-4 through 55-40
) and Example 1 (see paragraph 718-30-55-1) provide illustrations of how compensation cost is recognized for awards with service and performance conditions.
","snippet":"Awards of share-based compensation ordinarily specify a performance condition or a service condition (or both) that must be satisfied for a grantee to earn the right to benefit from the award. No compensation cost is rec…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:05be0688d1ded783867157d5b31a90a4abd2bf6309ee8456c6750aab337e420c","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-13","para":"30-13","html":"
The fair-value-based method described in paragraphs 718-10-30-6 and
718-10-30-10 through 30-14
uses fair value measurement techniques, and the grant-date share price and other pertinent factors are used in applying those techniques. However, the effects on the grant-date fair value of service and performance conditions that apply only during the employee's requisite service period or a nonemployee's vesting period are reflected based on the outcomes of those conditions. This Topic refers to the required measure as fair value.
","snippet":"The fair-value-based method described in paragraphs 718-10-30-6 and 718-10-30-10 through 30-14 uses fair value measurement techniques, and the grant-date share price and other pertinent factors are used in applying those…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9e9e9cec1dd19318673bbe42ee5f438fcd32e9c60ebc4270276d0c27fcda2cc2","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-14","para":"30-14","html":"
Some awards contain a market condition. The effect of a market condition is reflected in the grant-date fair value of an award. (Valuation techniques have been developed to value path-dependent options as well as other options with complex terms. Awards with market conditions, as defined in this Topic, are path-dependent options.) Compensation cost thus is recognized for an award with a market condition provided that the good is delivered or the service is rendered, regardless of when, if ever, the market condition is satisfied.
","snippet":"Some awards contain a market condition. The effect of a market condition is reflected in the grant-date fair value of an award. (Valuation techniques have been developed to value path-dependent options as well as other o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d29baed74d43a91c58ed65b4ce70359d1ad282ae931c12a126f9439efe7d3f63","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-15","para":"30-15","html":"
Market, performance, and service conditions (or any combination thereof) may affect an award's exercise price, contractual term, quantity, conversion ratio, or other factors that are considered in measuring an award's grant-date fair value. A grant-date fair value shall be estimated for each possible outcome of such a performance or service condition, and the final measure of compensation cost shall be based on the amount estimated at the grant date for the condition or outcome that is actually satisfied. Paragraphs
718-10-55-64 through 55-66
provide additional guidance on the effects of market, performance, and service conditions that affect factors other than vesting or exercisability. Examples 2 (see paragraph 718-20-55-35); 3 (see paragraph 718-20-55-41); 4 (see paragraph 718-20-55-47); 5 (see paragraph 718-20-55-51); and 7 (see paragraph 718-20-55-68) provide illustrations of accounting for awards with such conditions.
","snippet":"Market, performance, and service conditions (or any combination thereof) may affect an award's exercise price, contractual term, quantity, conversion ratio, or other factors that are considered in measuring an award's gr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f9bf63bfe9f5e0d0d895f2fad8776ceb6090da93f59820939ba23c6f3f5d10ba","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-16","para":"30-16","html":"
Paragraph not used.
","snippet":"Paragraph not used.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c13991e86a8b432ec3601286dadb9da424b0c4bce6ff5b9af658599adba2122f","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-17","para":"30-17","html":"
A nonvested equity share or nonvested equity share unit shall be measured at its fair value as if it were vested and issued on the grant date.
","snippet":"A nonvested equity share or nonvested equity share unit shall be measured at its fair value as if it were vested and issued on the grant date.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a4bd41d2e54bdf3f916be17a25acc8e41b4cfe95ec35e07c935af8e39b88fab9","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-18","para":"30-18","html":"
Nonvested shares granted in share-based payment transactions usually are referred to as restricted shares, but this Topic reserves that term for fully vested and outstanding shares whose sale is contractually or governmentally prohibited for a specified period of time.
","snippet":"Nonvested shares granted in share-based payment transactions usually are referred to as restricted shares, but this Topic reserves that term for fully vested and outstanding shares whose sale is contractually or governme…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:76c520028e9315e279bf863737442797793a64d64389150cf3903661592f84d1","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-19","para":"30-19","html":"
A restricted share awarded to a grantee, that is, a share that will be restricted after the grantee has a vested right to it, shall be measured at its fair value, which is the same amount for which a similarly restricted share would be issued to third parties. Example 8 (see paragraph 718-20-55-71) provides an illustration of accounting for an award of nonvested shares to employees.
","snippet":"A restricted share awarded to a grantee, that is, a share that will be restricted after the grantee has a vested right to it, shall be measured at its fair value, which is the same amount for which a similarly restricted…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:29d0a8ecf965acc3c578fa8040fa6158092ea7f2ca7bbecbef6e636021e7d83a","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f0d78350115dbb1d8634abf00f01af9aebefaf2bcb50538b63ea88c7424e2ead","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Nonpublic Entity—Calculated Value for Nonemployee Awards","paragraphs":[{"citation":"718-10-30-19A","para":"30-19A","html":"
Similar to employee equity share options and similar instruments, a nonpublic entity may not be able to reasonably estimate the fair value of nonemployee awards because it is not practicable for the nonpublic entity to estimate the expected volatility of its share price. In that situation, the nonpublic entity shall account for nonemployee equity share options and similar instruments on the basis of a value calculated using the historical volatility of an appropriate industry sector index instead of the expected volatility of the nonpublic entity's share price (the calculated value) in accordance with paragraph 718-10-30-20. A nonpublic entity's use of calculated value shall be consistent between employee share-based payment transactions and nonemployee share-based payment transactions.
","snippet":"Similar to employee equity share options and similar instruments, a nonpublic entity may not be able to reasonably estimate the fair value of nonemployee awards because it is not practicable for the nonpublic entity to e…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8b2c8626955a0bf6c2a1ea561cf25013043b5310c2f62a3ffbb27c325b02ae35","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:94615914ba303dbe898db1489915138b3ce1e1b7143bdc08310dc7faf16037e1","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Nonpublic Entity—Calculated Value","paragraphs":[{"citation":"718-10-30-20","para":"30-20","html":"
A nonpublic entity may not be able to reasonably estimate the fair value of its equity share options and similar instruments because it is not practicable for it to estimate the expected volatility of its share price. In that situation, the entity shall account for its equity share options and similar instruments based on a value calculated using the historical volatility of an appropriate industry sector index instead of the expected volatility of the entity's share price (the calculated value). Throughout the remainder of this Topic, provisions that apply to accounting for share options and similar instruments at fair value also apply to calculated value. Paragraphs
718-10-55-51 through 55-58
and Example 9 (see paragraph 718-20-55-76) provide additional guidance on applying the calculated value method to equity share options and similar instruments granted by a nonpublic entity.
","snippet":"A nonpublic entity may not be able to reasonably estimate the fair value of its equity share options and similar instruments because it is not practicable for it to estimate the expected volatility of its share price. In…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2380641f3d01caa71f7b3869be53a6d60afb8f3a06ca259a659e8cfc4f9b31ce","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e1eefff4de528b5a012024830e0e56f3fc15f445a8ae4d48bc8a0388e38138ea","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Nonpublic Entity—Practical Expedient for Expected Term","paragraphs":[{"citation":"718-10-30-20A","para":"30-20A","html":"
For an award that meets the conditions in paragraph 718-10-30-20B, a nonpublic entity may make an entity-wide accounting policy election to estimate the expected term using the following practical expedient:
  1. a
    If vesting is only dependent upon a service condition, a nonpublic entity shall estimate the expected term as the midpoint between the employee's requisite service period or the nonemployee's vesting period and the contractual term of the award.
  2. b
    If vesting is dependent upon satisfying a performance condition, a nonpublic entity first would determine whether the performance condition is probable of being achieved.
    1. 1
      If the nonpublic entity concludes that the performance condition is probable of being achieved, the nonpublic entity shall estimate the expected term as the midpoint between the employee's requisite service period (a nonpublic entity shall consider the guidance in paragraphs
      718-10-55-69 through 55-79
      when determining the requisite service period of the award)       or the nonemployee's vesting period and the contractual term.
    2. 2
      If the nonpublic entity concludes that the performance condition is not probable of being achieved, the nonpublic entity shall estimate the expected term as either:
      1. i
        The contractual term if the service period is implied (that is, the requisite service period or the nonemployee's vesting period is not explicitly stated but inferred based on the achievement of the performance condition at some undetermined point in the future)
      2. ii
        The midpoint between the employee's requisite service period or the nonemployee's vesting period and the contractual term if the requisite service period is stated explicitly.
Paragraph 718-10-55-50A provides implementation guidance on the practical expedient.
","snippet":"For an award that meets the conditions in paragraph 718-10-30-20B, a nonpublic entity may make an entity-wide accounting policy election to estimate the expected term using the following practical expedient:\n(a) If vesti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1a3dc65f80b87bd702de776fdb10bc68d92f79e34471d6851907be64021fe321","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-20B","para":"30-20B","html":"
A nonpublic entity that elects to apply the practical expedient in paragraph 718-10-30-20A shall apply the practical expedient to a share option or similar award that has all of the following characteristics:
  1. a
    The share option or similar award is granted at the money.
  2. b
    The grantee has only a limited time to exercise the award (typically 30-90 days) if the grantee no longer provides goods, terminates service after vesting, or ceases to be a customer.
  3. c
    The grantee can only exercise the award. The grantee cannot sell or hedge the award.
  4. d
    The award does not include a market condition.
A nonpublic entity that elects to apply the practical expedient in paragraph 718-10-30-20A may always elect to use the contractual term as the expected term when estimating the fair value of a nonemployee award as described in paragraph 718-10-30-10A. However, a nonpublic entity must apply the practical expedient in paragraph 718-10-30-20A for all nonemployee awards that have all the characteristics listed in this paragraph if that nonpublic entity does not elect to use the contractual term as the expected term and that nonpublic entity elects the accounting policy election to apply the practical expedient in paragraph 718-10-30-20A.
","snippet":"A nonpublic entity that elects to apply the practical expedient in paragraph 718-10-30-20A shall apply the practical expedient to a share option or similar award that has all of the following characteristics:\n(a) The sha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f40b30c3e5eff8d418e553761a9dc3f7ecec9affe679a8fa125c3a08ceedbf00","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5d0ceb14c7d1deb6d12bfbc9d8837cab3273d3b511f6a2b54bbba1c832f04947","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Nonpublic Entity—Practical Expedient for Current Price","paragraphs":[{"citation":"718-10-30-20C","para":"30-20C","html":"
As a practical expedient, a nonpublic entity may use a value determined by the reasonable application of a reasonable valuation method as the current price of its underlying share for purposes of determining the fair value of an award that is classified as equity in accordance with paragraphs
718-10-25-6 through 25-18
at grant date or upon a modification. This practical expedient may not be used for awards classified as liabilities in accordance with paragraphs
718-10-25-6 through 25-18
.
","snippet":"As a practical expedient, a nonpublic entity may use a value determined by the reasonable application of a reasonable valuation method as the current price of its underlying share for purposes of determining the fair val…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1ea568e89db5d55ffeeecd98a7bbecab948b11208f9375c3bf0bb2d02d334c6e","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-20D","para":"30-20D","html":"
The determination of whether a valuation method is reasonable, or whether an application of a valuation method is reasonable, shall be made based on the facts and circumstances as of the measurement date. Factors to be considered under a reasonable valuation method include, as applicable:
  1. a
    The value of tangible and intangible assets of the nonpublic entity
  2. b
    The present value of anticipated future cash flows of the nonpublic entity
  3. c
    The market value of stock or equity interests in similar corporations and other entities engaged in trades or businesses substantially similar to those engaged in by the nonpublic entity for which the stock is to be valued, the value of which can be readily determined through nondiscretionary, objective means (such as through trading prices on an established securities market or an amount paid in an arm's-length private transaction)
  4. d
    Recent arm's-length transactions involving the sale or transfer of stock or equity interests of the nonpublic entity
  5. e
    Other relevant factors such as control premiums or discounts for lack of marketability and whether the valuation method is used for other purposes that have a material economic effect on the nonpublic entity, its stockholders, or its creditors
  6. f
    The nonpublic entity's consistent use of a valuation method to determine the value of its stock or assets for other purposes, including for purposes unrelated to compensation of service providers.
","snippet":"The determination of whether a valuation method is reasonable, or whether an application of a valuation method is reasonable, shall be made based on the facts and circumstances as of the measurement date. Factors to be c…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8ec694896c899119841c55b46605053c47027e9da19afc15587f3bd98e7725c5","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-20E","para":"30-20E","html":"
The use of a valuation method is not reasonable if that valuation method does not take into consideration when applying its methodology all available information material to the value of the nonpublic entity.
","snippet":"The use of a valuation method is not reasonable if that valuation method does not take into consideration when applying its methodology all available information material to the value of the nonpublic entity.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0c92783919e05f3d2d6fdb490a022f1e77cc25c26c0c2c471c05bbe05b7bf08e","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-20F","para":"30-20F","html":"
The use of a value previously calculated under a valuation method is not reasonable as of a later date if either of the following conditions is met:
  1. a
    The calculation fails to reflect information available after the date of the calculation that may materially affect the value of the nonpublic entity (for example, the resolution of material litigation or the issuance of a patent).
  2. b
    The value was calculated with respect to a date that is more than 12 months earlier than the date for which the valuation is being used.
","snippet":"The use of a value previously calculated under a valuation method is not reasonable as of a later date if either of the following conditions is met:\n(a) The calculation fails to reflect information available after the da…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:977b1c246be52d3e1582ff0856dca021a2ceaff4ecd9032dec321fda5ec58ddc","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-20G","para":"30-20G","html":"
A valuation performed in accordance with Treasury Regulation Section 1.409A-1(b)(5)(iv)(B) having the characteristics described in paragraphs
718-10-30-20D through 30-20F
is an example of a valuation that is reasonable under the practical expedient in those paragraphs.
","snippet":"A valuation performed in accordance with Treasury Regulation Section 1.409A-1(b)(5)(iv)(B) having the characteristics described in paragraphs 718-10-30-20D through 30-20F is an example of a valuation that is reasonable u…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5ccbff80602ab37af5b1eae1a69748ad0cd727f05edd2233ceacc0bf047d280e","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-20H","para":"30-20H","html":"
A nonpublic entity that elects the practical expedient in paragraphs
718-10-30-20C through 30-20F
shall do so on a measurement-date-by-measurement-date basis. That is, the practical expedient shall be applied to all share-based awards within the scope of the practical expedient having the same underlying share and the same measurement date.
","snippet":"A nonpublic entity that elects the practical expedient in paragraphs 718-10-30-20C through 30-20F shall do so on a measurement-date-by-measurement-date basis. That is, the practical expedient shall be applied to all shar…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aba5c9613ae414358981e69d1b25039d0691945083dc62092abda5b58407987a","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9f965790f8408f4246f1a7db429add57e3c6b194440c5f059595cbba85258524","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Difficulty of Estimation","paragraphs":[{"citation":"718-10-30-21","para":"30-21","html":"
It should be possible to reasonably estimate the fair value of most equity share options and other equity instruments at the date they are granted. Section 718-10-55 illustrates techniques for estimating the fair values of several instruments with complicated features. However, in rare circumstances, it may not be possible to reasonably estimate the fair value of an equity share option or other equity instrument at the grant date because of the complexity of its terms.
","snippet":"It should be possible to reasonably estimate the fair value of most equity share options and other equity instruments at the date they are granted. Section 718-10-55 illustrates techniques for estimating the fair values …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c1cd85a1020ac6d36d8c3be4f554be20e528ce41f1960738ab90c95fed9eef0d","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-22","para":"30-22","html":"
An equity instrument for which it is not possible to reasonably estimate fair value at the grant date shall be accounted for based on its intrinsic value (see paragraph 718-20-35-1 for measurement after issue date).
","snippet":"An equity instrument for which it is not possible to reasonably estimate fair value at the grant date shall be accounted for based on its intrinsic value (see paragraph 718-20-35-1 for measurement after issue date).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fd7238078e0ad18d747eba522701df7fbec4484fcad07502233d7e4f3214e873","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:75718ca4305d78363afc6abef3c88695c72557e9cd148dbe2aa422ce17da95e0","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Reload and Contingent Features","paragraphs":[{"citation":"718-10-30-23","para":"30-23","html":"
The fair value of each award of equity instruments, including an award of options with a reload feature (reload options), shall be measured separately based on its terms and the share price and other pertinent factors at the grant date. The effect of a reload feature in the terms of an award shall not be included in estimating the grant-date fair value of the award. Rather, a subsequent grant of reload options pursuant to that provision shall be accounted for as a separate award when the reload options are granted.
","snippet":"The fair value of each award of equity instruments, including an award of options with a reload feature (reload options), shall be measured separately based on its terms and the share price and other pertinent factors at…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e220449e852b99feeeab67595c9b8b358262f5243dab3dd9192041ab8bf39c34","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-24","para":"30-24","html":"
A contingent feature of an award that might cause a grantee to return to the entity either equity instruments earned or realized gains from the sale of equity instruments earned for consideration that is less than fair value on the date of transfer (including no consideration), such as a clawback feature (see paragraph 718-10-55-8), shall not be reflected in estimating the grant-date fair value of an equity instrument.
","snippet":"A contingent feature of an award that might cause a grantee to return to the entity either equity instruments earned or realized gains from the sale of equity instruments earned for consideration that is less than fair v…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:80306eb34778563f2728ff378193da714495c3ca67bc95d12a36c097bb42e5f1","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:84a6682aa2ae527d020f3720f61f76d75da8460771ffbdf7309813bd6fb24e83","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Requisite Service Period","paragraphs":[{"citation":"718-10-30-25","para":"30-25","html":"
An entity shall make its initial best estimate of the requisite service period at the grant date (or at the service inception date, if that date precedes the grant date) and shall base accruals of compensation cost on that period.
","snippet":"An entity shall make its initial best estimate of the requisite service period at the grant date (or at the service inception date, if that date precedes the grant date) and shall base accruals of compensation cost on th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9f898b5930d1705d2f4fc00970cd8faf67d6a6518832f2180712d1e9149d8cc8","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-26","para":"30-26","html":"
The initial best estimate and any subsequent adjustment to that estimate of the requisite service period for an award with a combination of market, performance, or service conditions shall be based on an analysis of all of the following:
  1. a
    All vesting and exercisability conditions
  2. b
    All explicit, implicit, and derived service periods
  3. c
    The probability that performance or service conditions will be satisfied.
","snippet":"The initial best estimate and any subsequent adjustment to that estimate of the requisite service period for an award with a combination of market, performance, or service conditions shall be based on an analysis of all …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ec78da0e865a5a38e77b57b8a368911ad297a8935febad5c8d8b31eeb3ad7ed7","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f452505056317fe4f999655c4af963dbfa7a372ae75a531a6001127d0dce39f","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"block":null,"heading":"Market, Performance, and Service Conditions","paragraphs":[{"citation":"718-10-30-27","para":"30-27","html":"
Performance or service conditions that affect vesting are not reflected in estimating the fair value of an award at the grant date because those conditions are restrictions that stem from the forfeitability of instruments to which grantees have not yet earned the right. However, the effect of a market condition is reflected in estimating the fair value of an award at the grant date (see paragraph 718-10-30-14). For purposes of this Topic, a market condition is not considered to be a vesting condition, and an award is not deemed to be forfeited solely because a market condition is not satisfied.
","snippet":"Performance or service conditions that affect vesting are not reflected in estimating the fair value of an award at the grant date because those conditions are restrictions that stem from the forfeitability of instrument…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52b12386aefdfdda5908978c9e77de572aac68e0874bc5c572decc8d52c8f34e","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},{"citation":"718-10-30-28","para":"30-28","html":"
In some cases, the terms of an award may provide that a performance target that affects vesting could be achieved after an employee completes the requisite service period or a nonemployee satisfies a vesting period. That is, the grantee would be eligible to vest in the award regardless of whether the grantee is rendering service or delivering goods on the date the performance target is achieved. A performance target that affects vesting and that could be achieved after an employee's requisite service period or a nonemployee's vesting period shall be accounted for as a performance condition. As such, the performance target shall not be reflected in estimating the fair value of the award at the grant date. Compensation cost shall be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the service or goods already have been provided. If the performance target becomes probable of being achieved before the end of the employee's requisite service period or the nonemployee's vesting period, the remaining unrecognized compensation cost for which service or goods have not yet been provided shall be recognized prospectively over the remaining employee's requisite service period or the nonemployee's vesting period. The total amount of compensation cost recognized during and after the employee's requisite service period or the nonemployee's vesting period shall reflect the number of awards that are expected to vest based on the performance target and shall be adjusted to reflect those awards that ultimately vest. An entity that has an accounting policy to account for forfeitures when they occur in accordance with paragraph 718-10-35-1D or 718-10-35-3 shall reverse compensation cost previously recognized, in the period the award is forfeited, for an award that is forfeited before completion of the employee's requisite service period or the nonemployee's vesting period. The employee's requisite service period and the nonemployee's vesting period end when the grantee can cease rendering service or delivering goods and still be eligible to vest in the award if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period in which the performance target could be achieved) may differ from the employee's requisite service period or the nonemployee's vesting period.
","snippet":"In some cases, the terms of an award may provide that a performance target that affects vesting could be achieved after an employee completes the requisite service period or a nonemployee satisfies a vesting period. That…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:59e65d0d7309b2e3154b0b4221c9f43960e1bde568e0a5e04bcd2535e50ec158","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a054db00ec5a24deef361abc7bb0f9858bc7ab4dfaf6235bb453a001df2c51a5","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f89c073ee0425de0ae3d9d6b6ec7f5ca7291e6144a6a55058a08200c2eca6349","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f89c073ee0425de0ae3d9d6b6ec7f5ca7291e6144a6a55058a08200c2eca6349","downloaded_from":"2026-09-10T01:03:34.633Z","last_downloaded_at":"2026-09-10T01:03:34.633Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480513","source_sha256":"62d8e249a5c262fb8efd3a67b461acefd0de26d61dfb500c94157bf4ef08e670"}}