FASB News
Private Company Council to Discuss Profits Interest Compensation
FASB’s advisory body, the Private Company Council, plans at its June 25 meeting to take up talks on accounting for profits interest, a relatively new form of equity compensation issued by Limited Liability Companies (LLC) that is growing in use. Profits interest is a type of equity compensation granted to employees that enables them to share in the future growth in the value of a company. This type of compensation may be tax free, depending on its structure with respect to Internal Revenue Service rules. It has become a popular form of compensation, used to incentivize or attract talent. Accountants have said that the current reporting rules for profits interest are complex and need to be simplified.
GASB News
Virtual Public Hearing to Cover Concepts for Footnote Disclosures
GASB said it will hold a public hearing online on July 28 that will cover concepts it plans to use to determine the types of footnote disclosures state and local governments will need to provide to financial statements. The hearing will be held on GASB Exposure Draft, 3-34, “Communication Methods in General Purpose External Financial Reports That Contain Basic Financial Statements: Notes to Financial Statements,” which was published in February 2020. The exposure document describes the purpose of notes to the financial statements and the users of those notes. It also defines the criteria for reporting information in notes, including the types of information that should be disclosed in footnotes; the types of information that are not appropriate for footnotes; and the degree of importance that disclosed information should possess. These concepts could also help entities better understand the fundamental concepts underlying future GASB standards, the board said. The deadline to submit a request to participate in the hearing is June 30.
PCAOB News
Duhnke to Speak At July 8 Webinar for Audit Committees.
After a complete change in the board’s leadership in early 2018, the PCAOB has ramped up its outreach activities with investors, public companies and their audit committees, and others in capital markets. The board will host a webinar for audit committee members on July 8 that will cover the PCAOB’s new inspection reports; auditing and inspecting audits in the COVID-19 environment; new and recent auditing standards activity, such as estimates, specialists, critical audit matters (CAM), and systems of quality control; data and technology; as well as an audience Q&A. “Audit committees are on the front lines of promoting audit quality, which is why one of the Board’s strategic priorities is to interact more often and more directly with them,” PCAOB Chairman William Duhnke said in a statement. “This webinar for audit committee members is a first for the PCAOB, and we look forward to the opportunity to further engage.”
