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Share-award forfeiture belongs in an award-by-award timeline. A forfeiture occurs when an award fails to vest because an applicable service or performance condition is not satisfied. Apply the entity's supported policy for estimating forfeitures or accounting for them as they occur, and reconcile units and cost.
Apply it
If 1,000 of 10,000 service-based units are forfeited before vesting, remove those units from the vesting population and reverse or adjust their attributed cost under the elected policy. Keep the date and reason in the rollforward.
Review share-award forfeiture against service condition. Reconcile share-award forfeiture to performance condition share award, the dated share-award forfeiture evidence, and its final presentation.
Keep the boundary clear
Expiration after an award has vested is not a forfeiture. Failure of a market target after requisite service is rendered also does not produce the same reversal.
Authority
Read ASC 718-10-35-3 for compensation cost and the effect of forfeitures.
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Learning resources
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- Service condition — Apply
To apply this concept: Required. This earlier idea supplies the scope, timing, or measurement basis needed here.