Explicit service period definition

What is an Explicit Service Period?

An explicit service period is the amount of time stated in a share-based payment award that an employee must serve before the award will be paid out. For example, if an award document states that shares will vest after four years of continuous service, then four years is the explicit service period. This is an essential concept in the accounting for stock-based compensation.

Related AccountingTools Course

Accounting for Stock-Based Compensation