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.