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Type of provision |
Employee awards |
Nonemployee awards |
Service condition only
|
The midpoint between the end of the requisite service period and the contractual term of the award
|
The midpoint between the end of the vesting period and the contractual term of the award
|
Performance condition probable of being achieved
|
The midpoint between the end of the requisite service period and the contractual term
|
The midpoint between the end of the vesting period and the contractual term
|
Performance condition not probable of being achieved
|
If the service period is implied:
If the service period is explicit:
|
If the service period is implied:
If the service period is explicit:
|
Jan 1 20X1 |
|||
Revenue from widgets |
$ 2,000 |
||
Less: Sales incentive |
500 |
||
Net revenue |
$ 1,500 |
Date |
Share value |
||
Jan 1
|
$ 1.00 |
||
Mar 31
|
$ 1.05 |
||
Jun 30
|
$ 1.50 |
||
Sept 30
|
$ 1.00 |
||
Dec 31
|
$ 2.00 |
Date |
Cumulative revenue recognized |
Probability assessment of Customer earning award |
Cumulative amount recorded as a reduction of revenue |
Jan 1 |
no accounting |
||
Mar 31 |
$1,000 (1 widget) |
Yes |
$1,500 × 1/3 = $500 |
Jun 30 |
$2,000 (2 widgets) |
No, only 2 widgets anticipated |
$01 |
Sept 30 |
$2,000 (2 widgets) |
Yes |
$1,500 × 2/3 = $1,0002 |
Dec 31 |
$3,000 (3 widgets) |
Yes |
$1,500 |
Date |
Fair value |
||
Jan 1 |
$ 1.00 |
||
Mar 31 |
$ 1.05 |
||
Jun 30 |
$ 1.50 |
||
Sept 30 |
$ 1.00 |
||
Dec 31 |
$ 2.00 |
Date |
SAR value |
Mark-to-market liability |
Recorded as reduction of revenue at grant date fair value as each widget is delivered |
Cumulative amount recorded as a reduction of revenue |
Cumulative amount recorded outside of revenue |
Amount recorded outside of revenue in the quarter |
1/1 |
$ 1.00 |
no accounting |
||||
3/31 |
$ 1.05 |
$525 (1,500×$1.05*1/3) |
$500 |
$500
(1 widget delivered) |
$25 |
$25 |
6/30 |
$ 1.50 |
$1,500 (1,500×$1.50*2/3) |
$500 |
$1,000
(2 widgets delivered) |
$500 |
$475 |
9/30 |
$ 1.00 |
$1,000 (1,500×$1.00*2/3) |
$1,000
(2 widgets delivered) |
$0 |
$(500) |
|
12/31 |
$ 2.00 |
$3,000 (1,500×$2.00*3/3) |
$500 |
$1,500
(3 widgets delivered) |
$1,500 |
$1,500 |
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