# ASC 718-20-05: Compensation—Stock Compensation — Awards Classified as Equity — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

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## ASC 718-20-05: 05 Overview and Background

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##### [718-20-05-1](https://asc.understandingaccounting.org/asc/718/20/#718-20-05-1)

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Share-based payment awards may be classified as either equity or liabilities. This Subtopic deals with instruments classified as equity. It is interrelated with Subtopic 718-10, which contains guidance applicable to instruments classified as either equity or liabilities issued 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."). It may also be necessary in some cases to refer to the guidance contained in Subtopic 718-30.