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Stock Comp Accounting Shortcut Aims to Help Private Companies

Aug. 4, 2021, 2:36 PM

A narrow subset of private companies could benefit from a U.S. accounting rulemaker plan that gives private company employers a break on how to value share-based perks they offer to their workers.

Private companies that perform special valuations to measure share-based compensation for tax reporting purposes won’t have to do a separate valuation to comply with financial accounting requirements, the Financial Accounting Standards Board agreed on Wednesday. Private companies could use the valuations they perform, including “reasonable” methods such as those to meet tax code Section 409A, to comply with ASC 718, the financial accounting standard that covers stock and ...