To the Point - FASB clarifies guidance on measuring fair value of equity securities subject to contractual sale restrictions


The FASB issued final guidance to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered when measuring fair value. Recognizing a contractual sale restriction as a separate unit of account is not permitted. The guidance will be applied prospectively, with special transition provisions for entities that qualify as investment companies under ASC 946. The guidance is effective in 2024 for calendar-year public business entities and in 2025 for all other calendar-year companies. Early adoption is permitted.

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