FASB Amends Fair Value Measurement Guidance for Investment Companies With Equity Securities Subject to Contractual Sale Restrictions

The FASB has released ASU 2026-03, which amends ASC 820 to require investment companies within the scope of ASC 946 to consider the effect of a contractual sale restriction when measuring an equity security’s fair value. The ASU applies to investment companies within the scope of ASC 946 that hold equity securities that are measured at fair value and are subject to contractual sale restrictions. Under the ASU, an investment company must consider the contractual restriction that prohibits the sale of an equity security in measuring the fair value of this equity security on the measurement date.

The ASU is effective for annual reporting periods beginning after December 15, 2027, including interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period on any date on or after the issuance date of the ASU.

For more information, see the press release on the FASB’s Web site.