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To the Point - FASB expands derivative scope exceptions and clarifies guidance for share-based noncash consideration

Overview

Our publication discusses the FASB’s final guidance that excludes certain contracts with underlyings based on the operations or activities of one of the parties to the contract from the scope of derivative accounting. The guidance also clarifies that an entity receiving share-based noncash consideration from a customer for the transfer of goods or services in a revenue contract is required to apply the noncash consideration guidance in ASC 606, unless and until the entity’s right to receive or retain the share-based noncash consideration is unconditional under ASC 606. The guidance is effective for all entities for annual reporting periods beginning after 15 December 2026, and interim periods within those periods.

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