Functional word formation describes differences between lexical meanings involved in derivation and compounding. More often than not, they are accompanied by grammatical differences. In synchronic word formation, grammatical differences between lexical bases depend on formatives and/or the morphosyntactic and syntactic distribution of the involved lexical bases. Syntactic changes, especially the change in argument structures, have been the center of frameworks whose main focus is on syntax. Less attention has been paid to covert grammatical differences in the involved lexical bases, such as the addition or replacement of a/telicity, non/transitivity, un/countability, un/gradability, or aspectual functions. The present paper proposes a relatively simple method to describe lexical and grammatical differences that are involved in derivation and compounding. The description uses glossing labels, extending their application to the description of lexical bases. It is intended to be as compositional as possible.