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Graded vesting belongs in an award-by-award timeline. A graded-vesting award has separate portions that vest on different dates. Preserve the quantity, fair value, service period, forfeitures, and attribution method for every tranche before combining totals.
Apply it
A 30,000-unit award vests 10,000 units after each of one, two, and three years. The first tranche has a one-year service period and the third has a three-year period. A permitted straight-line policy still must recognize at least the vested amount.
Review graded vesting against requisite service period. Reconcile graded vesting to service condition, the dated graded vesting evidence, and its final presentation.
The graded vesting record ties requisite service period to its source date, measured amount, and service condition effect.
Keep the boundary clear
A single final vesting date is cliff vesting. Averaging tranche lives without applying the entity's supported policy can shift cost between periods and hide forfeitures.
Authority
Read ASC 718-10-35-8 for the policy choice for graded-vesting awards.
Put the concept to work
Apply this concept
- Explain and apply graded vesting within a reconciled award-timeline workpaper using supplied authoritative facts.
Learning resources
Choose a lesson, try an application, or inspect the sources behind this concept.
Build on these ideas
- Requisite service period — Apply
To apply this concept: Required. This earlier idea supplies the scope, timing, or measurement basis needed here.