# ASC 718-40-15: Compensation—Stock Compensation — Employee Stock Ownership Plans — 15 Scope and Scope Exceptions

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/718/40/#15-scope-and-scope-exceptions)

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## ASC 718-40-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/718/40/#15-scope-and-scope-exceptions)

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#### Overall Guidance

##### [718-40-15-1](https://asc.understandingaccounting.org/asc/718/40/#718-40-15-1)

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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 718-10-15, with specific qualifications noted below.

#### Entities

##### [718-40-15-2](https://asc.understandingaccounting.org/asc/718/40/#718-40-15-2)

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The guidance in this Subtopic applies to all employers with [employee stock ownership plans](https://asc.understandingaccounting.org/glossary/e/#employee-stock-ownership-plan "An employee stock ownership plan is an employee benefit plan that is described by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 as a stock bonus plan, or combination stock bonus and money purchase pension plan, designed to invest primarily in employer stock. Also called an employee share ownership plan."), both leveraged and nonleveraged.

#### Transactions

##### [718-40-15-3](https://asc.understandingaccounting.org/asc/718/40/#718-40-15-3)

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This Subtopic provides guidance on an employer's accounting for employee stock ownership plans. There are two basic forms of employee stock ownership plan: leveraged and nonleveraged. This Subtopic addresses the financial reporting for each separately.

#### Other Considerations

##### [718-40-15-4](https://asc.understandingaccounting.org/asc/718/40/#718-40-15-4)

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The guidance in this Subtopic does not address the following:

1.  a
    
    Financial reporting by employee stock ownership plans.

### Leveraged Employee Stock Ownership Plans

#### Overall Guidance

##### [718-40-15-5](https://asc.understandingaccounting.org/asc/718/40/#718-40-15-5)

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The Leveraged Employee Stock Ownership Plans Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph [718-40-15-1](https://asc.understandingaccounting.org/asc/718/40/#718-40-15-1).

### Nonleveraged Employee Stock Ownership Plans

##### [718-40-15-6](https://asc.understandingaccounting.org/asc/718/40/#718-40-15-6)

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The Nonleveraged Employee Stock Ownership Plans Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph [718-40-15-1](https://asc.understandingaccounting.org/asc/718/40/#718-40-15-1).