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Accounting

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On October 26, 2022, the SEC adopted its much-anticipated final clawback rules requiring U.S. listed issuers to: develop and implement a policy for the recovery of incentive-based compensation that is erroneously “received” by current and former executive officers during the three completed fiscal years immediately preceding the date that the issuer is required to prepare an accounting restatement (capturing both “Big R” and “Little R” restatements); and file that policy as an annual report exhibit…

Amendment to Rule 701’s Enhanced Disclosure Threshold On July 18, 2018, the Securities and Exchange Commission (SEC) amended Rule 701(e) of the Securities Act of 1933, increasing from $5 million to $10 million the amount of securities that issuers may sell in reliance on Rule 701 during a 12-month period without triggering enhanced disclosure requirements. The amendment will become effective imminently upon its publication in the Federal Register. Background and Application of Rule 701’s Enhanced…

The Financial Accounting Standards Board (FASB) recently approved the decision to apply ASC 718 — the accounting treatment that applies to equity awards granted to employees (and non-employee directors) — to equity awards granted to consultants and other individuals who are not employees. Applying ASC 718 to Non-Employees Previously, ASC 505-50 applied to equity awards that were granted to non employees.  Under ASC 505-50, the vesting date — rather than the grant date — is…