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An ESPP with a fixed discount percentage off the purchase date price, no look-back feature, and fixed withholdings would be liability classified under ASC 718-10-25-7 and ASC 480-10-25-14 until settlement because it is essentially an award that embodies an unconditional obligation to issue a variable number of shares for a fixed monetary amount known at inception. Upon settlement, the liability would be reclassified to equity.
The compensation element of an ESPP with a look-back feature would be equity classified under ASC 718-10-25-7 and ASC 480-10-25-14 as the monetary value of the award is not fixed at the grant date and the holder is subject to the risks and rewards of equity ownership. As noted in SC 5.3, any cash withheld from employees during the purchase period would be reflected as a withholding liability until the shares are purchased.

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