Modification Accounting Requirements Clarified for Stock-Based Compensation

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The Financial Accounting Standards Board (FASB) issued final guidance on when modification accounting applies, which is expected to result in fewer changes to award terms requiring modification accounting. Modification accounting will apply when an award modification changes its fair value, vesting or classification as equity or liability. The amendments do not change the accounting for modifications or disclosure requirements in Topic 718. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted.

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