Bulletin No. 2005-52 December 27, 2005

Notice 2005–99, page 1214. Regulations section 1.482–7(d)(2)(iii)(B) provides an elective method whereby controlled participants of a qualified cost sharing arrangement (QCSA) may take into account the cost of certain stock-option compensation in the same amount, and as of the same time, as the fair value of the stock options reflected as a charge against income in certain audited financial statements or disclosed in footnotes to such statements. This notice extends this elective method to certain restricted shares and restricted share units. It also permits taxpayers employing the elective method to choose to determine whether stock-based compensation is related to the intangible development area by analyzing the activities of the employee recipients of the stock-based compensation by reference to financial reporting periods, identifying the related compensation on a period by period basis.