Write a note on FASB topic: “Compensation-Stock Compensation: Improvements To Nonemployee Share-Based Payment Accounting” in which you need to address the following:

1. Why is the fasb issuing this asu?

2. How will the changes improve accounting for nonemployee share-based payments?
3. How do the amendments improve current generally accepted accounting principles (gaap)?
4. Who will be affected by the new guidance?
5. When will the asu be effective?
6. What about transition?

Answer rating: 100% (QA)

On June 20 2018 the Financial Accounting Standards Board FASB issued an Accounting Standards Update ASU intended to reduce cost and complexity and to improve financial reporting for sharebased payments issued to nonemployees for example service providers external legal counsel suppliers etc 1 The Board is issuing this ASU as part of its Simplification Initiative The objective of the Simplification Initiative is to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting The ASU expands the scope of Topic 718 CompensationStock Compensation which currently only includes sharebased payments issued to employees to also include sharebased payments issued to nonemployees for goods and services Consequently the accounting for sharebased payments to nonemployees and employees will be substantially aligned The ASU supersedes Subtopic 50550 EquityEquityBased Payments to NonEmployees The accounting for nonemployee sharebased payment ... View the full answer