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Overview
The AICPA’s Financial Reporting Executive Committee has released for comment drafts of two updated chapters from its Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. These revisions provide guidance on calibrating a company’s valuation of shares underlying share-based compensation arrangements to secondary market transaction prices (Chapter 8) and on recognizing compensation cost for secondary market transactions in accordance with Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation (Chapter 9).
While the guide is not authoritative, the revisions reflect what the AICPA’s Equity Securities Task Force views as best practices. Comments are due by 20 September 2024. Additional updates to the guide will be released in the future.