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Equity-classified share award belongs in an award-by-award timeline. An equity-classified award is generally measured at grant-date fair value and is not remeasured for later changes in the issuer's share price. Classification follows the substantive rights and settlement obligations in the award and related arrangements.
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A fixed award of 10,000 shares with a supported grant-date value of $18 has a $180,000 compensation basis before forfeiture and condition analysis. A later rise to $25 does not remeasure that equity award solely because the share price changed.
Review equity-classified share award against share based payment award. Reconcile equity-classified share award to liability classified share award, the dated equity-classified share award evidence, and its final presentation.
Keep the boundary clear
An intention to settle in shares does not override a cash obligation or another liability condition. Reassess classification when terms change or a contingent settlement event becomes relevant.
Authority
Read ASC 718-10-25-7 for classification of share-based payment instruments.
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- Share-based payment award — Apply
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- Share-award modification — Apply
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