Companies that invest in stocks that can’t be sold may get clarity on how to measure their value.
The Financial Accounting Standards Board on Wednesday issued a narrow proposal that aims to clear up how to assess the fair value of equity securities that have contractual restrictions, such as lockup agreements, that prohibit their sale. Under the proposal, companies wouldn’t have to take the contractual restrictions into account.
A majority of the board said that the proposal would clarify a confusing part of ASC 820, Fair Value Measurement.
“The Board recognized that the current ...