US IRS grants consent to change to elective method of measuring stock based compensation in CSA

The US IRS, in a private letter ruling released December 12, granted a corporation prospective consent to change to the elective method for measurement and timing of employee stock options, restricted shares, and restricted share units pursuant to Treas.Reg. § 1.482-7(d)(3)(iii)(B) and Notice 2005-99, for purposes of determining the amount  the corporation must include as intangible development costs in a cost sharing arrangement (“CSA”) with its subsidiary.

The Service also granted the taxpayer prospective consent to change to period-by-period identification of stock based compensation with the intangible development costs, pursuant to Notice 2005-99. See, LTR 201450015.