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Unrecognized compensation cost belongs in an award-by-award timeline. Unrecognized compensation cost is the award cost expected to be recognized in future periods as service or other recognition conditions are satisfied. Reconcile it by award, tranche, classification, remaining service period, and expected recognition pattern.
Apply it
A $500,000 equity award has $190,000 of cumulative recognized cost. If no other adjustment applies, unrecognized cost is $310,000. A straight-line estimate over 2.5 remaining years averages $124,000 per year, but the actual pattern may differ.
Review unrecognized compensation cost against requisite service period. Reconcile unrecognized compensation cost to graded vesting, the dated unrecognized compensation cost evidence, and its final presentation.
Keep the boundary clear
Unrecognized cost is a schedule and disclosure amount. It is not automatically a present liability, cash commitment, or forecast of the award's settlement value.
Authority
Read ASC 718-10-50-2 for disclosures about compensation cost and award information.
Put the concept to work
Apply this concept
- Explain and apply unrecognized compensation cost 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.