Private Company Council Meeting Recap

December 11, 2018

The Private Company Council (PCC) met on Tuesday, December 11, 2018. Below is a brief summary of issues addressed by the PCC at the meeting, categorized by project:

• Disclosures by Business Entities about Government Assistance: PCC members provided feedback on the scope of the project and the types of government assistance that would require disclosure under this standard. PCC members were generally split on their view of the project, with users expressing strong support and some preparers and auditors questioning whether the expected benefits would justify the costs. The PCC suggested that the FASB initiate educational initiatives to ensure private company stakeholders are aware of the new requirements, particularly the type of assistance included in the scope.
• Goodwill and Certain Identifiable Intangible Assets: PCC members were supportive of the FASB's Invitation to Comment and noted that future amendments should align future amendments should align with the alternatives afforded private companies today with respect to amortizing goodwill.
• Distinguishing Liabilities from Equity: Given the narrow scope of the project, PCC members were very supportive of adding a probability threshold to the indexation component of the derivative scope exception.
• Disclosure Improvements in Response to SEC Release on Disclosure Update and Simplification: PCC members discussed the recently-added FASB research project. Some disclosures received broad support from PCC members, while other potential disclosures were not widely supported—primarily due to concerns over relevance of these disclosures to private company users.
• Codification Improvements—Share-Based Consideration Payable to a Customer: PCC members unanimously supported the tentative Board decisions reached on the share-based consideration payable to a customer project.
• Practical Expedient to Measure Grant-Date Fair Value of Equity-Classified Share-Based Payments: The PCC added a project to its Technical Agenda to consider a practical expedient to measure grant-date fair value of equity share-based payments for private companies. PCC members and Board members discussed a possible approach. PCC members directed FASB staff to conduct further research in advance of the next meeting on the operability and understandability of a potential expedient that would allow a private company to use the strike price (as the input for fair value) of the underlying share when measuring grant-date fair value of an equity-classified award.

The next PCC meeting will be held on Tuesday, April 2, 2019, in Norwalk, CT.

PCC Meeting Recaps are provided for those interested in following the activities of the PCC. Official positions of the PCC and the FASB are reached only after extensive due process & deliberations. More details on the PCC's input on the FASB's projects can be found within the meeting minutes, which will be published on the PCC website in the coming weeks.