CCH Accounting for Compensation Arrangements offers professionals comprehensive guidance for applying the complex and expansive requirements of FASB Statement No. 123 (Revised 2004), Share-Based Payment. It discusses the financial reporting implications of stock-based compensation arrangements for employees, employee stock purchase plans, certain other compensation arrangements for employees, and share awards to nonemployees for goods and services.

This publication includes recent views of the FASB, including those reflected in FSP FAS 123R-5, "Amendment of FASB Staff Position FAS 123(R)-1," and FSP FAS 123R-6,"Technical Corrections of FASB Statement No. 123(R)." Reference is made to all pertinent opinions, statements, pronouncements, interpretations, and bulletins that affect accounting for share-based payments and other forms of compensation.

This in-depth resource provides professionals with a practical reference tool by selectively combining information from the official text of these standards, along with other information drawn from the AICPA, SEC, FASB interpretations, FASB staff positions, consensuses of the Emerging Issues Task Force, and lessons learned from leading accounting practitioners.

Topics and Contents

Preface

About the Authors

1: The Context and Basic Principles of Statement 123R

2: Introduction to Specific Plan Types and Features

3: Classification of An Award As Equity or a Liability

4: Special Rules for Nonpublic Companies

5: Fundamentals of Accounting for Different Types of Awards

6: Accounting for Common Plan Features

7: Methods to Calculate the Fair Value of Equity Share Options

8: Recognition of Compensation Cost

9: Award Modifications, Business Combinations, and Equity Restructurings

10: Understanding the Balance Sheet

11: Income Taxation and Accounting for Income Tax Effects

12: Disclosures

13: Plans Involving Subsidiaries and And Equity Method Investments

14: Stock-Based Compensation Awards to Nonemployees

15: Earnings Per Share

16: Employee Stock Ownership Plans

17: Cash Compensation, Other Employment Benefits, and Severance Payments

18: Statement 123R Examples

19: Recent Developments

Appendix 1: Comparison of Key Accounting Issues in Opinion 25, Statement 123, and Statement 123R

Appendix 2: Financial Statement Disclosures for Stock-Based Compensation Plans and Employee Stock Ownership Plans

Appendix 3: Illustrative Financial Statement Disclosure for Stock-Based Compensation Plans

Appendix 4: Disclosure of Information About Equity Compensation Plans—Item 201(D) of Regulation S-K

Appendix 5: Summary Compensation Table—Item 402 of Regulation S-K

Appendix 6: Index of Accounting Literature Affecting Compensation Arrangements

Appendix 7: September 19, 2006, Letter From Chief Accountant of SEC Concerning Opinion 25 Restatements

Appendix 8: Letters From SEC Chief Accountant--Market Instruments to Estimate Stock Compensation Cost

Index

About the Authors

Donald P. Delves, founder and president of The Delves Group, is a highly sought-after consultant and speaker on corporate governance and executive pay and performance. With over 20 years' experience in consulting with major corporate boards and executive teams across the country, Don helps companies ensure that they are getting what they pay for with their compensation dollars. Don is a frequently interviewed and cited as an expert in major media, including Fortune, The Wall Street Journal, and National Public Radio. He also recently testified before the U.S. Senate and the FASB on the hotly debated issue of stock option expensing.

Editorial Reviewing Author: Ronald G. Pippin, CPA, Managing Director, Accounting Research Manager

Ron authors, maintains, and approves all of the updates to the accounting and SEC content on the Accounting Research Manager (ARM) database. He also provides oversight guidance to the audit and other material added to ARM. Among other responsibilities at ARM, Ron reviews the completeness of the content for this publication, CCH Accounting for Compensation Arrangements.

Ron has 20 years of public accounting experience, including six years as an audit partner with Arthur Andersen. He also served as the senior technical accounting officer at a Chicago-based Fortune 50 firm for 10 years. Before Ron joined CCH, he worked in Andersen's Professional Standards Group (commonly known as the ‘‘national office’’), where he consulted on technical accounting matters and contributed to the authoring and maintenance of ARM’s content. Wolters Kluwer purchased ARM from Andersen in 2002.