FASB Rules on Valuation Disclosures
The Financial Accounting Standards Board (FASB) announced that it would "indefinitely defer certain disclosures about investments held by a nonpublic employee benefit plan in its plan sponsor's own nonpublic equity securities." FASB had originally proposed disclosures that would have required a description of the specific valuation methods used and the specific rates applied. The impact of this ruling would have been to make public otherwise private valuation information for non-public ESOP companies.
FASB solicited public feedback and received 72 letters. Of those, 69 supported the proposed deferral. Only the Department of Labor and one other advocated for the implementation of the disclosure requirements.
FASB Chairman Leslie F. Seidman wrote that the decision addresses the concern of private company shareholders that "certain disclosure requirements would potentially provide proprietary information when their employee benefit plans' financial statements are posted on the plan regulator's website."
Thanks to all those who assisted in apprising the FASB of the deleterious effects of such a ruling.