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.

 

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