Invitation to Comment on Accounting for Stock-Based
Compensation

Invitation to Comment, Accounting for Stock-Based Compensation: A Comparison of FASB Statement No. 123, Accounting for Stock-Based Compensation, and Its Related Interpretations, and IASB Proposed IFRS, Share-based Payment, is being issued by the Financial Accounting Standards Board (FASB or Board) to solicit comments on certain issues that the Board will discuss when, in accordance with its objectives of improving U.S. financial accounting and reporting standards and promoting international convergence of high-quality accounting standards, it considers whether it should propose any changes to the U.S. accounting standards on stock-based compensation. The Board believes the Invitation to Comment will also be useful to constituents that are planning to respond to the International Accounting Standards Board (IASB) Proposed International Financial Reporting Standard, Share-based Payment (Proposed IFRS).

The document has been divided into nine separate files to manage the time required to download the files and to allow constituents to retrieve specific portions of the Invitation to Comment.

The first file contains the main body of the Invitation to Comment, which includes an executive summary, and Appendixes A, B, and C. The main body of the Invitation to Comment includes a discussion and analysis of primary similarities of and differences between FASB Statement No. 123, Accounting for Stock-Based Compensation, and the Proposed IFRS. Appendix A discusses the secondary similarities of and differences between Statement 123 and the Proposed IFRS. Appendix B presents the complete list of issues that the Board would like respondents to consider when commenting on the Invitation to Comment. Appendix C contains a list of the interpretations of Opinion 25 and related Emerging Issues Task Force Issues.

The following files contain Appendixes D, E, and F. Appendix D contains the full text of Statement 123, including its basis for conclusions. Appendix E contains the full text of EITF Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” Appendix F contains the full text of EITF Issue No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.” Those documents are referenced in the Invitation to Comment, and they are requisite in understanding the issues discussed therein.

The following three files make up Appendix G, the Proposed IFRS. The first file contains the mandatory requirements of the Proposed IFRS; the second file contains the Proposed IFRS’s basis for conclusions; and the third file contains draft implementation guidance.

Appendix H presents the illustrations included in Appendix A of the Proposed IFRS reworked in accordance with the provisions of Statement 123.

The following file includes Appendixes I and J of the Invitation to Comment. Appendixes I and J are intended to facilitate a comparative analysis of the Proposed IFRS and Statement 123. Appendix I presents the comparative glossaries of the Proposed IFRS and Statement 123. Appendix J presents a side-by-side comparison of the Proposed IFRS and Statement 123.