Deloitte
Accounting Research Tool
...
2020

FASB Proposes a Practical Expedient for Determining the Share Price Input for Measuring Equity-Classified Share-Option Awards for Private Companies (August 18, 2020)

Heads Up | Volume 27, Issue 17
August 18, 2020
Image cannot be displayed

FASB Proposes a Practical Expedient for Determining the Share Price Input for Measuring Equity-Classified Share-Option Awards for Private Companies

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.

Footnotes

1
FASB Proposed Accounting Standards Update (ASU), Determining the Current Price of an Underlying Share for Equity-Classified Share-Option Awards.
2
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.
3
FASB Accounting Standards Codification Topic 718, Compensation — Stock Compensation.