# ASC 718-40-35: Compensation—Stock Compensation — Employee Stock Ownership Plans — 35 Subsequent Measurement

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/718/40/#35-subsequent-measurement)

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## ASC 718-40-35: 35 Subsequent Measurement

[Read section](https://asc.understandingaccounting.org/asc/718/40/#35-subsequent-measurement)

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### Leveraged Employee Stock Ownership Plans

#### Debt Repayment

##### [718-40-35-1](https://asc.understandingaccounting.org/asc/718/40/#718-40-35-1)

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Debt is generally repaid by the [employee stock ownership plan](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.") from employer contributions and dividends on the employer's stock. As the debt is repaid, [suspense shares](https://asc.understandingaccounting.org/glossary/s/#suspense-shares "The shares initially held by the employee stock ownership plan in a suspense account are called suspense shares. Suspense shares are shares that have not been released, committed to be released, or allocated to participant accounts. Suspense shares generally collateralize employee stock ownership plan debt.") are released from the suspense account, and the released shares must be allocated to individual accounts as of the end of the employee stock ownership plan's fiscal year.