PwC comments on the FASB's proposed share-based payment simplifications

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Comment letter , PwC US Aug 14, 2015

PwC supports the majority of the FASB's proposal to simplify stock-based compensation accounting.


PwC submitted comments on the FASB’s proposed Accounting Standards Update, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. We agree with the majority of the proposed amendments and believe they achieve the spirit of the FASB’s simplification initiative: reducing cost and complexity while maintaining or improving the usefulness of information provided to users of the financial statements. However, we believe that some may not, or the incremental costs of change to implement the simplification may outweigh the benefits relative to the status quo.

In particular, we are supportive of the proposal to record all tax effects of share-based payment awards in the income statement. However, we understand the challenges that would be caused by the increased variability of the effective tax rate from this approach. Therefore, if opposition to the proposed change is significant, in the spirit of simplification, we would encourage the FASB to explore an alternative of recording all tax windfalls and shortfalls in equity.

We also expressed some concern that the proposed changes to the guidance for repurchase features may not reduce complexity and will still be highly judgmental, as well as be open to potential misinterpretation.

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Heather Horn

Heather Horn

US Strategic Thought Leader, National Professional Services Group, PwC US

David Schmid

David Schmid

International Accounting Leader, National Professional Services Group, PwC US

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