The Financial Reporting Executive Committee (FinREC) of the AICPA released a working draft of two revised chapters of the Valuation of Privately-Held Company Equity Securities Issued as Compensation Guide (sometimes referred to as the “cheap stock guide”). This non-authoritative guidance provides both accounting and valuation considerations relevant to stock-based compensation awards granted by privately-held entities when there are secondary market transactions in their shares. Although the updated chapters may not be finalized until 2025, the content in the guide is interpretive guidance relative to existing authoritative literature and will not have a definitive effective date. Therefore, we believe impacted companies should consider the guidance in the draft chapters for any future valuations and secondary market transactions. Read our summary.

For more on the disclosure rules, read SEC adopts cybersecurity disclosure rules. For more on the materiality assessment for cyber incidents, read Making materiality judgments in cybersecurity incident reporting.

At its June 26 meeting, the FASB completed redeliberations of its Disaggregation of Income Statement Expenses project and directed the staff to draft a final standard, which is expected to be issued later this year. Among other final decisions, the FASB decided the new disclosures will be required in both interim and annual financials (with the exception of certain policy disclosures) and will be required on a prospective basis, with optional retrospective application. The new standard will only apply to public business entities and will be effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. For more information, refer to the meeting summary on the FASB website.