ASC 718 is the standard accounting method for expensing options, which involves recognizing the transfer of value in awarding stock options and equity compensation to employees. It includes various classifications such as awards classified as equity or liabilities, and encompasses employee stock ownership plans and share purchase plans. Additionally, it addresses the implications for income taxes related to these awards.

1. What is ASC 718?
ASC 718 is the standard accounting method
used by companies to “expense options,” or
recognize the transfer of value involved in
awarding stock options and other types of
equity compensation to employees

2. Types of ASC 718
1
2
3
718-10 Overall
718-20 Awards
Classified as
Equity
718-30 Awards
Classified as
Liabilities

3. Types of ASC 718
4
5
6
718-40
Employee Stock
Ownership Plans
718-50
Employee Share
Purchase Plans
718-740 Income
Taxes