# ASC 718-10-45: Compensation—Stock Compensation — Overall — 45 Other Presentation Matters Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/718/10/#45-other-presentation-matters) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:03:42.291Z to 2026-09-10T01:03:42.291Z Record version: sha256:46ece3f530f8386e462b6823434589f526f158eebf922b4341d06887d66d79de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 718-10-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/718/10/#45-other-presentation-matters) SEC content: no #### Earnings per Share ##### [718-10-45-1](https://asc.understandingaccounting.org/asc/718/10/#718-10-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:42.291Z to 2026-09-10T01:03:42.291Z Record version: sha256:f843b89d27dd2da1c97390b04061b79849a94acbb0b97081eee977b3fbed7346 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Topic 260 requires that equity share options, [nonvested shares](https://asc.understandingaccounting.org/glossary/n/#nonvested-shares "Shares that an entity has not yet issued because the agreed-upon consideration, such as the delivery of specified goods or services and any other conditions necessary to earn the right to benefit from the instruments, has not yet been satisfied. Nonvested shares cannot be sold. The restriction on sale of nonvested shares is due to the forfeitability of the shares if specified events occur (or do not occur)."), and similar equity instruments granted under share-based payment transactions be treated as potential common shares in computing diluted earnings per share (EPS). Diluted EPS shall be based on the actual number of options or shares granted and not yet forfeited regardless of the entity's accounting policy for forfeitures in accordance with paragraphs [718-10-35-1D](https://asc.understandingaccounting.org/asc/718/10/#718-10-35-1D) and [718-10-35-3](https://asc.understandingaccounting.org/asc/718/10/#718-10-35-3), unless doing so would be antidilutive. If [vesting](https://asc.understandingaccounting.org/glossary/v/#vest "To earn the rights to. A share-based payment award becomes vested at the date that the grantee's right to receive or retain shares, other instruments, or cash under the award is no longer contingent on satisfaction of either a service condition or a performance condition. Market conditions are not vesting conditions. The stated vesting provisions of an award often establish the employee's requisite service period or the nonemployee's vesting period, and an award that has reached the end of the applicable period is vested. However, as indicated in the definition of requisite service period and equally applicable to a nonemployee's vesting period, the stated vesting period may differ from those periods in certain circumstances. Thus, the more precise terms would be options, shares, or awards for which the requisite good has been delivered or service has been rendered and the end of the employee's requisite service period or the nonemployee's vesting period.") in or the ability to exercise (or retain) an [award](https://asc.understandingaccounting.org/glossary/a/#award "The collective noun for multiple instruments with the same terms and conditions granted at the same time either to a single grantee or to a group of grantees. An award may specify multiple vesting dates, referred to as graded vesting, and different parts of an award may have different expected terms. References to an award also apply to a portion of an award.") is contingent on a performance or [market condition](https://asc.understandingaccounting.org/glossary/m/#market-condition "A condition affecting the exercise price, exercisability, or other pertinent factors used in determining the fair value of an award under a share-based payment arrangement that relates to the achievement of either of the following: A specified price of the issuer's shares or a specified amount of intrinsic value indexed solely to the issuer's shares A specified price of the issuer's shares in terms of a similar (or index of similar) equity security (securities). The term similar as used in this definition refers to an equity security of another entity that has the same type of residual rights. For example, common stock of one entity generally would be similar to the common stock of another entity for this purpose."), such as the level of future earnings, the shares or share options shall be treated as contingently issuable shares in accordance with paragraphs [260-10-45-48 through 45-57](https://asc.understandingaccounting.org/asc/260/10/#260-10-45-48) . If equity share options or other equity instruments are outstanding for only part of a period, the shares issuable shall be weighted to reflect the portion of the period during which the equity instruments are outstanding. ##### [718-10-45-2](https://asc.understandingaccounting.org/asc/718/10/#718-10-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:42.291Z to 2026-09-10T01:03:42.291Z Record version: sha256:54c3857bd77139e85cf354eb3419a8c511d00f0973ee1c567563b408ecaf9b3f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [260-10-45-29 through 45-34](https://asc.understandingaccounting.org/asc/260/10/#260-10-45-29) and Example 8 (see paragraph [260-10-55-68](https://asc.understandingaccounting.org/asc/260/10/#260-10-55-68)) provide guidance on applying the treasury stock method for equity instruments granted in [share-based payment transactions](https://asc.understandingaccounting.org/glossary/s/#share-based-payment-transactions "A transaction under a share-based payment arrangement, including a transaction in which an entity acquires goods or services because related parties or other holders of economic interests in that entity awards a share-based payment to an employee or other supplier of goods or services for the entity's benefit. Also called share-based compensation transactions.") in determining diluted EPS. #### Classification of Assets Other Than a Note or a Receivable for Nonemployee Awards ##### [718-10-45-3](https://asc.understandingaccounting.org/asc/718/10/#718-10-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:42.291Z to 2026-09-10T01:03:42.291Z Record version: sha256:76df409e049cd5438a3c4240c37af665597c5da2a47b1315226d20717be62013 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As discussed in paragraph [718-10-35-1B](https://asc.understandingaccounting.org/asc/718/10/#718-10-35-1B), a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, nonforfeitable, nonemployee share-based payment awards that are [issued](https://asc.understandingaccounting.org/glossary/i/#issued-issuance-or-issuing-of-an-equity-instrument "An equity instrument is issued when the issuing entity receives the agreed-upon consideration, which may be cash, an enforceable right to receive cash, or another financial instrument, goods, or services. An entity may conditionally transfer an equity instrument to another party under an arrangement that permits that party to choose at a later date or for a specified time whether to deliver the consideration or to forfeit the right to the conditionally transferred instrument with no further obligation. In that situation, the equity instrument is not issued until the issuing entity has received the consideration. The grant of stock options or other equity instruments subject to vesting conditions is not considered to be issuance.") at the date the grantor and nonemployee enter into an agreement for goods or services (and no specific performance is required by the nonemployee to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the award. The transferability (or lack thereof) of the awards shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which awards are transferred to nonemployees in exchange for goods or services.