FVC2427. New Guidance on Secondary Market Transactions - Implications for Private Company Common Stock Valuations

The AICPA has released a working draft of two updated chapters of the Accounting & Valuation Guide: Valuation of Privately-Held-Company Equity Securities Issued as Compensation. The updated guidance better incorporates the requirements of FASB ASC 820 with regard to estimating fair value in the principal market for the securities and maximizing the use of observable inputs, and will likely have significant implications for financial reporting valuations of common stock underlying stock-based compensation awards. Please join Jay Seliber and Amanda Miller, the co-chairs of the Task Force, to discuss the updated guidance and its ramifications.

Learning Objectives:

• Identify when to apply the new AICPA guidance on considering secondary market transactions in the valuation of privately-held-company equity securities underlying stock-based compensation awards.
• Identify how to determine the principal market for privately-held-company equity securities underlying stock-based compensation awards.
• Identify what information should be considered when valuing privately-held-company equity securities underlying stock-based compensation awards.
• Identify the factors to consider when assessing the relevance of secondary market transactions and the relevance of other indications of value.