On August 17, 2020, the FASB issued for public comment a proposed ASU1 that would allow private companies2 to use a practical expedient to determine the current market price of the underlying share of equity-classified share-option awards issued to grantees. Under the practical expedient, private companies would make this determination by using a valuation that such companies have performed to comply with the “presumption of reasonableness” requirements in Section 409A of the U.S. Internal Revenue Code.
FASB Proposed Accounting Standards Update (ASU), Determining the Current Price of an Underlying Share for Equity-Classified Share-Option Awards.
The amendments in the proposed ASU would affect all nonpublic entities (as defined in the FASB Accounting Standards Codification (ASC) master glossary). See paragraph BC5 of the proposed ASU.
FASB Accounting Standards Codification Topic 718, Compensation — Stock Compensation.