FASB Releases Proposed ASU to Enhance Fair Value Reporting by Investment Companies

The FASB has issued a proposed Accounting Standards Update (ASU) that would amend the guidance in ASC 820 to require that investment companies subject to ASC 946 consider “a contractual restriction on the sale of an equity security . . . in measuring the fair value of the equity security.” Such companies would also be required to “disclose the amount of the discount attributable to the contractual sale restriction.” The proposal is being released in response to concerns from stakeholders that the current requirements lead to “fair value measurements that do not reflect how market participants would value equity securities that are subject to contractual sale restrictions.”

Comments on the proposed ASU are due by July 17, 2026. For more information, see the press release on the FASB’s Web site.