AICPA Releases Working Draft of Updates to Guide on Valuation of Privately-Held-Company Equity Securities Issued as Compensation

On December 21, 2025, the AICPA’s Financial Reporting Executive Committee (FinREC) released for public comment a working draft of its updated Accounting and Valuation Guide Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Although the guide is nonauthoritative, the revisions reflect the AICPA’s views on current best practices for estimating the fair value of equity securities underlying share-based payment arrangements.

The working draft includes proposed updates to sections addressing the valuation of equity securities in complex capital structures, primary and secondary market transactions, and related accounting and disclosure matters. The purpose of the updates is to align the guide more closely with existing accounting standards, including ASC 820, Fair Value Measurement, and ASC 718, Compensation — Stock Compensation.

The proposed revisions may affect how private companies evaluate and support fair value estimates for equity securities underlying share-based payment arrangements. Private companies and other stakeholders involved in valuations for financial reporting purposes should consider the draft guidance when considering future transactions and valuation analyses.

Comments on the working draft are due by June 1, 2026. For more information about the draft updates to the AICPA guide on valuing equity securities, see Deloitte’s March 28, 2025, Technology Spotlight.