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Overview
Our publication summarizes the FASB’s proposal that would clarify the guidance in ASC 606 and ASC 718 on the accounting for share-based consideration granted to a customer in conjunction with selling goods or services. The proposal would revise the definition of a performance condition to include conditions based on a customer’s purchases and eliminate the policy election allowing grantors to account for forfeitures of customer awards as they occur. It also would clarify that the guidance on constraining estimates of variable consideration does not apply to share-based consideration payable to a customer. Comments are due by 14 November 2024.