Simplifications to Share-based Payments and Debt Accounting Considered
Standards setters plan to tweak narrow areas of the stock compensation and debt accounting guidance, according to an agenda released by the FASB on July 25. FASB will determine whether to draft final rules on a March 2019 proposal aimed at providing consistency to reporting share-based payments made to customers. The proposed changes would require companies to measure share-based payment awards issued to customers at the grant date of the award, a clarification that would remove any confusion and provide consistent reporting on the issue. The guidance has been viewed by some companies as costly and complex. The board received 12 comment letters on the changes, issued under proposed Accounting Standards Update (ASU) 2019-400, “Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements—Share-Based Consideration Payable to a Customer.”
Chief Administrative Officer Suzanne Kinzer to Depart
On July 26, the PCAOB said that Chief Administrative Officer Suzanne Kinzer will leave the board after having served for nearly 16 years. “Suzanne has ably led the Office of Administration and accomplished the key priorities she set out to achieve when she took on the role more than five years ago,” PCAOB Chairman William Duhnke said in a statement. “We are grateful for Suzanne’s sound advice and guidance, and we wish her the very best in her next chapter.” As the top person for all of the board’s administrative matters, the PCAOB said Kinzer led her staff to improve the board’s operations using technology and new platforms for budgeting, financial management, compensation and reward structures, learning and leadership development, and facilities management. Sue Lee, currently the PCAOB’s chief risk officer, will also serve as acting chief administrative officer, according to an update to the PCAOB’s senior staff webpage.
Guide Explains Accounting and Valuation of Portfolio Company Investments
The AICPA has published an accounting and valuation guide for portfolio company investments held by investment companies. The guide addresses many issues that have cropped up over time—such as units of account, transaction costs, calibration, the impact of control and marketability, and back-testing—in determining fair value estimates of investments. It also contains 16 case studies. The AICPA said that the Portfolio Company Investments Accounting and Valuation Guide may also be useful for other types of companies, such as corporate venture capital groups or pension funds, which make investments in similar types of portfolio companies and pursue similar strategies. But the organization said that numerous aspects of these non-investment companies were not considered or contemplated when the guide was being drafted.