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Covering ESOPs and employee ownership

FASB Approves Indefinite Deferral for ESOPs

The Financial Services Accounting Board (FASB) voted to indefinitely defer the Accounting Standards Update (ASU) 2011-04 which would require companies to disclose the significant assumptions and methodologies used in the valuation of company securities that are not publicly traded. The Update had been written in such a way that privately-held companies were likely to be required to provide a footnote in their ESOP audit reports filed with the 5500 form that would have provide information to outside parties that many ESOP companies considered detrimental to the interests of their businesses.

In February 2013, The ESOP Association joined the Employee-Owned S Corporations of America (ESCA) and the National Center for Employee Ownership (NCEO) in sending a letter to FASB regarding the proposed Update. The link to the letter can be found here.

 

Filed under: Government Affairs, , , ,

The ESOP Association Signs Joint Letter to FASB

The ESOP Association joined the Employee-Owned S Corporations of America (ESCA) and the National Center for Employee Ownership (NCEO) in sending a letter to the Financial Accounting Standards Board (FASB) urging the carve-out of private companies from new rules that may require private companies, including ESOPs, to disclose information in their ESOP audit reports filed with the 5500 form about the significant assumptions and methodologies used in the valuation of the company’s stock.

The Accounting Standards Update (ASU) 2011-04 would require companies to disclose the significant assumptions and methodologies used in the valuation of company securities that are not publicly traded and has been written in a way such that privately-held companies are likely to be required to provide a footnote in their ESOP audit reports filed with the 5500 form that would provide information to outside parties that many of our members may consider detrimental to the interests of their businesses and our employee-owners.

ESOP Association Chair, Mark R. Lomele, Senior Vice President and Chief Financial Officer of Recology, located in San Francisco, CA signed the letter on behalf of the Association.

To read the letter: click here.

Filed under: Government Affairs, , , , ,

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