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4.17 Valuation—Guidance on expected volatility and expected term
Publication date: 30 Nov 2022
us IFRS & US GAAP guide
Companies that report under US GAAP may place greater reliance on implied short-term volatility to estimate volatility. Companies that report under IFRS do not have the option of using the “simplified method” of calculating expected term provided by SAB Topic 14 and ASC 718. As a result, there could be differences in estimated fair values.
US GAAP | IFRS |
SAB Topic 14 includes guidance on expected volatility and expected term, which includes (1) guidelines for reliance on implied volatility and (2) the “simplified method” for calculating the expected term for qualifying awards.
Nonpublic entities may use a practical expedient for determining the expected term similar to the simplified method.
| IFRS does not include comparable guidance.
|
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