more-arw search

Q&A Forum

"Change in control" of an entity and Share based payments (FAS 123R)

When do you accrue the liability for the share based payment awards (i.e. restricted share units (RSU) / performance share units (PSU)) if the RSU/PSU units are vested due to change in control provision. Is it based on the change of control date (assume February 28, 20X1) OR can an entity accrue the liability on the date it is "probable" that the payout would be made (assume December 31, 20XX)?


Mark Stokes
Title: CFO
Company: Private
(CFO, Private) |

I can see that going either way based on just how probable the transaction is. Probable is one of those words that should be banned from accounting - it's just too loose. Who determines what "probable" means in each case? Does it make it better if your auditor agrees that an event is probable? This is a great case to ask about b/c deals can and often do fall apart at the eleventh hour. Thus, facts and circumstances will lead you to make a decision based on your best judgment of the risk of not reporting a material liability vs. the probability that an event won't happen.

Topic Expert
Sunil Thukral
Title: Controller/Technical Accounting Advisory..
Company: Consultant
(Controller/Technical Accounting Advisory/ SEC Reporting, Consultant) |

Hi Mark,

Thanks for your comments. If accunting was really black and white, we would not have "probable" included in GAAP. :-)

Anyone else in the group who has encountered this situation before?



Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.