New FASB Staff Position on Dividends or Dividend Equivalents in Share Plans - from www.nceo.org

New FASB Staff Position on Dividends or Dividend Equivalents in Share Plans

In FASB Staff Position (No. EITF 03-6-1), Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities, the
Financial Accounting Standards Board (FASB) states that unvested
share-based payment awards that contain nonforfeitable rights to
dividends or dividend equivalents (whether paid or unpaid) are
participating securities and shall be included in the computation of
earnings per share under the two-class method. The guidance (see here
for a copy) is effective for financial statements issued for fiscal
years beginning after December 15, 2008, and interim periods within
those years.