1.2.4 Share-Based Compensation Allocation Table

Issue

The reporting of stock-based compensation split over various expense categories in the income statement is inconsistent across a number of filings.  The taxonomy provides a table[1] that allows a filer to dimensionally qualify the stock-based compensation between the following members:

• Cost of Sales
• Research and Development
• Selling and Marketing
• Restructuring
• General and Administrative

However, in practice filers have used the following approaches:

• Approach 1 – Used the equivalent expense items to the members as the line item GeneralAndAdministrativeExpense and dimensionally qualified it by using a taxonomy element such as StockBasedCompensationPlanMember shown in Figure 17 or an extension member like StockBasedCompensationMember.
• Approach 2 – Used either AllocatedShareBasedCompensationExpense or ShareBasedCompensation items and qualified them by members that represent the income statement categories.
• Approach 3 – Created extension items to represent the different categorizations.

The intention of the FASB is that Approach 2 should be used.

Recommendation

Use Approach 2 and dimensionally qualify the stock-based compensation line item between the following members:

• Cost of Sales (CostOfSalesMember)
• Research and Development (ResearchAndDevelopmentExpenseMember)
• Selling and Marketing (SellingAndMarketingExpenseMember)
• Restructuring (RestructuringChargesMember)
• General and Administrative (GeneralAndAdministrativeExpenseMember)

[1] ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTable