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Stock-based compensation refers to all forms of employee compensation that fall within the scope of ASC 718, CompensationStock Compensation, including shares, options, and other equity instruments. Liability-classified awards are also within the scope of ASC 718 if they are based, in part, on the price of the reporting entity’s stock, or settled through the issuance of equity.
SEC guidance related to stock-based compensation is included in SAB Topic 14, Share-Based Payment (codified in ASC 718-10-S99-1).
New guidance
In June 2018, the FASB issued ASU 2018-07, CompensationStock Compensation: Improvements to Nonemployee Share-Based Payment Accounting  See FSP 15.6 for information on ASU 2018-07.
The FASB has also issued an exposure draft for codification improvements related to share-based payments to customers (ASU 2018-07). The proposal includes amendments to ASC 606, Revenue from contracts with customers, and ASC 718, Compensation-Stock compensation. Under this proposed guidance, the accounting for awards issued to customers will be similar to the accounting for other non-employee awards. This includes measuring awards at the grant date and classifying the awards based on the guidance in ASC 718. However, the value of the awards will be treated as a payment to a customer under ASC 606. As of the cut-off date of this guide, the proposed amendments have not yet been issued. Reporting entities should continue to monitor the status of these proposed amendments and any additional updates to the new revenue and stock compensation guidance.
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