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Liability-classified share award belongs in an award-by-award timeline. A liability-classified award is remeasured at fair value at each reporting date until settlement. The period cost combines service attribution with changes in the liability's measurement, so the workpaper must preserve both movements.
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A cash-settled award is worth $90,000 when one-third of the service is complete, so the liability is $30,000. If fair value rises to $120,000 when two-thirds is complete, the liability becomes $80,000 and cumulative cost increases by $50,000.
Review liability-classified share award against share based payment award. Reconcile liability-classified share award to equity classified share award, the dated liability-classified share award evidence, and its final presentation.
Keep the boundary clear
Vesting does not stop liability remeasurement. Classification depends on the issuer's obligations and settlement terms rather than the plan's label or the holder's expected choice.
Authority
Read ASC 718-10-25-11 for conditions that require liability classification.
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Build on these ideas
- Share-based payment award — Apply
To apply this concept: Required. This earlier idea supplies the scope, timing, or measurement basis needed here.