Accounting Proposal Seeks to Clarify Incentive-Based Comp

Small companies struggling with how to account for special share-based pay they award to their workers could get some guidance from US accounting rulemakers, the Financial Accounting Standards Board agreed Wednesday.

FASB will release a proposal in 2023 that calls for adding new examples to its share-based compensation rules so companies can figure out if a type of award called profits interests meets the definition of stock awards. The proposal, which will be released for a 60-day comment period, won’t change the nuts-and-bolts accounting for these bonuses or any of the math involved, FASB said.

“This will be a ...