Definition
Restricted Stock Unit – A promise to deliver company shares to an employee once vesting conditions are met (commonly a time-based service period, sometimes paired with a "liquidity condition" satisfied only by an IPO or acquisition). Pre-IPO companies routinely defer all RSU expense until the liquidity condition is met, then recognize years of accumulated compensation cost in a single quarter once they go public — producing a large, non-cash accounting loss that isn't a sign of deteriorating operations. Found In: Income Statement (stock-based compensation), Notes to Financial Statements