{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/718/30/#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":"718-30","subtopic_title":"Awards Classified as Liabilities","section":{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":null,"heading":"Measurement Objective and Measurement Date","paragraphs":[{"citation":"718-30-30-1","para":"30-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_CD41F88D-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">At the <a href=\"/glossary/g/#grant-date\" class=\"term\" title=\"The date at which a grantor and a grantee reach a mutual understanding of the key terms and conditions of a share-based payment award. The grantor becomes contingently obligated on the grant date to issue equity instruments or transfer assets to a grantee who delivers goods or renders services or purchases goods or services as a customer. Awards made under an arrangement that is subject to shareholder approval are not deemed to be granted until that approval is obtained unless approval is essentially a formality (or perfunctory), for example, if management and the members of the board of directors control enough votes to approve the arrangement. Similarly, individual awards that are subject to approval by the board of directors, management, or both are not deemed to be granted until all such approvals are obtained. The grant date for an award of equity instruments is the date that a grantee begins to benefit from, or be adversely affected by, subsequent changes in the price of the grantor's equity shares. Paragraph 718-10-25-5 provides guidance on determining the grant date. See Service Inception Date.\"><span>grant date</span></a>, the measurement objective for liabilities incurred under <a href=\"/glossary/s/#share-based-payment-arrangements\" class=\"term\" title=\"An arrangement under which either of the following conditions is met: One or more suppliers of goods or services (including employees) receive awards of equity shares, equity share options, or other equity instruments. The entity incurs liabilities to suppliers that meet either of the following conditions: The amounts are based, at least in part, on the price of the entity's shares or other equity instruments. (The phrase at least in part is used because an award may be indexed to both the price of the entity's shares and something other than either the price of the entity's shares or a market, performance, or service condition.) The awards require or may require settlement by issuance of the entity's shares. The term shares includes various forms of ownership interest that may not take the legal form of securities (for example, partnership interests), as well as other interests, including those that are liabilities in substance but not in form. Equity shares refers only to shares that are accounted for as equity. Also called share-based compensation arrangements.\"><span>share-based compensation arrangements</span></a> is the same as the measurement objective for equity instruments awarded to grantees as described in paragraph <a href=\"/asc/718/10/#718-10-30-6\" class=\"xref\">718-10-30-6</a>. However, the <a href=\"/glossary/m/#measurement-date\" class=\"term\" title=\"The date at which the equity share price and other pertinent factors, such as expected volatility, that enter into measurement of the total recognized amount of compensation cost for an award of share-based payment are fixed.\"><span>measurement date</span></a> for liability instruments is the date of <a href=\"/glossary/s/#settlement-of-an-award\" class=\"term\" title=\"An action or event that irrevocably extinguishes the issuing entity's obligation under a share-based payment award. Transactions and events that constitute settlements include the following: Exercise of a share option or lapse of an option at the end of its contractual term Vesting of shares Forfeiture of shares or share options due to failure to satisfy a vesting condition An entity's repurchase of instruments in exchange for assets or for fully vested and transferable equity instruments. The vesting of a share option is not a settlement because the entity remains obligated to issue shares upon exercise of the option.\"><span>settlement</span></a>. </span></span></div></div>","snippet":"At the grant date, the measurement objective for liabilities incurred under share-based compensation arrangements is the same as the measurement objective for equity instruments awarded to grantees as described in paragr…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:20b8b6bb914800a1e0f4f73885523f5ad904b86ac35fa210c2b2bc4286e78cbc","downloaded_from":"2026-09-10T01:05:03.899Z","last_downloaded_at":"2026-09-10T01:05:03.899Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480874","source_sha256":"b37b4f9b95691fbba77eeeaf1b372e0deea7adbf8ba2b8bc799303502f3bb8b3"}},{"citation":"718-30-30-2","para":"30-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_CD41F9A1-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">A <a href=\"/glossary/n/#nonpublic-entity\" class=\"term\" title=\"Any entity other than one that meets any of the following criteria: Has equity securities that trade in a public market either on a stock exchange (domestic or foreign) or in an over-the-counter market, including securities quoted only locally or regionally Makes a filing with a regulatory agency in preparation for the sale of any class of equity securities in a public market Is controlled by an entity covered by the preceding criteria. An entity that has only debt securities trading in a public market (or that has made a filing with a regulatory agency in preparation to trade only debt securities) is a nonpublic entity.\"><span>nonpublic entity</span></a> shall make a policy decision of whether to measure all of its liabilities incurred under share-based payment arrangements </span></span><span class=\"sfragment\" id=\"sfr_CD41FA66-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">(for employee and nonemployee awards) </span></span><span class=\"sfragment\" id=\"sfr_CD41FB20-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">issued in exchange for distinct goods or services </span></span><span class=\"sfragment\" id=\"sfr_CD41FBE5-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">at <a href=\"/glossary/f/#fair-value\" class=\"term\" title=\"The amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.\"><span>fair value</span></a> or at <a href=\"/glossary/i/#intrinsic-value\" class=\"term\" title=\"The amount by which the fair value of the underlying stock exceeds the exercise price of an option. For example, an option with an exercise price of $20 on a stock whose current market price is $25 has an intrinsic value of $5. (A nonvested share may be described as an option on that share with an exercise price of zero. Thus, the fair value of a share is the same as the intrinsic value of such an option on that share.)\"><span>intrinsic value</span></a>. </span></span><span class=\"sfragment\" id=\"sfr_CD41FCA5-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">However, a nonpublic entity shall initially and subsequently measure awards determined to be consideration payable to a customer (as described in paragraph <a href=\"/asc/606/10/#606-10-32-25\" class=\"xref\">606-10-32-25</a>) at fair value. </span></span></div></div>","snippet":"A nonpublic entity shall make a policy decision of whether to measure all of its liabilities incurred under share-based payment arrangements (for employee and nonemployee awards) issued in exchange for distinct goods or …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f6bae2b784836e89bd2db660deec00d4ba59646c5230c78a68494b7774fe656","downloaded_from":"2026-09-10T01:05:03.899Z","last_downloaded_at":"2026-09-10T01:05:03.899Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480874","source_sha256":"b37b4f9b95691fbba77eeeaf1b372e0deea7adbf8ba2b8bc799303502f3bb8b3"}},{"citation":"718-30-30-2A","para":"30-2A","html":"<div class=\"asc-body\"><div class=\"norm-text\"><a href=\"/updates/asu-2016-09/\" class=\"xref\">Paragraph superseded by Accounting Standards Update No. 2016-09</a>.</div></div>","snippet":"Paragraph superseded by Accounting Standards Update No. 2016-09.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b7e07c86072287793ad708233c8f2ecae3c804b46a026adc8f18b162873af71b","downloaded_from":"2026-09-10T01:05:03.899Z","last_downloaded_at":"2026-09-10T01:05:03.899Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480874","source_sha256":"b37b4f9b95691fbba77eeeaf1b372e0deea7adbf8ba2b8bc799303502f3bb8b3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:67ba01fbf1b6e17e425845e0e742871a06f6b7c6ef0c3b5ccd39a5358c397623","downloaded_from":"2026-09-10T01:05:03.899Z","last_downloaded_at":"2026-09-10T01:05:03.899Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480874","source_sha256":"b37b4f9b95691fbba77eeeaf1b372e0deea7adbf8ba2b8bc799303502f3bb8b3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8648ba5ca6e1d89e07d5d6dc09043c9b5f8d9f481c7c653fbae4789a9ee1926d","downloaded_from":"2026-09-10T01:05:03.899Z","last_downloaded_at":"2026-09-10T01:05:03.899Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480874","source_sha256":"b37b4f9b95691fbba77eeeaf1b372e0deea7adbf8ba2b8bc799303502f3bb8b3"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8648ba5ca6e1d89e07d5d6dc09043c9b5f8d9f481c7c653fbae4789a9ee1926d","downloaded_from":"2026-09-10T01:05:03.899Z","last_downloaded_at":"2026-09-10T01:05:03.899Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147480874","source_sha256":"b37b4f9b95691fbba77eeeaf1b372e0deea7adbf8ba2b8bc799303502f3bb8b3"}}