Decisions on Restricted Equity Stock Sales Would Cause Investment Funds to Overstate Assets
FASB’s recent decisions related to valuing equity securities that are subject to contractual sale restrictions would cause investment funds and pension funds to overstate the fair value of those assets, members of the Private Company Council (PCC) told the board late June. In May, the board voted 5-to-2 to propose an amendment to ASC Topic 820, Fair Value Measurement, to clarify that lockup agreements (i.e. contractual sale restrictions of equity securities) are entity-specific and not part of the unit of account in the measurement of the fair value of equity securities. “If we went forward with the board’s tentative decision, we would be systematically overstating the fair value of every holding that is subject to a lockup. If your shares are subject to a lockup you cannot access that market that is in the market price and so your shares are worth less – any market participant could tell you that something that’s subject to a lockup is not worth the same as something that’s not,” Timothy Curt, former managing director of Warburg Pincus LLC in New York, said on June 22. The topic will be brought to the PCC’s agenda in September, a FASB staff member assured the panel.
New Chair Barckow to Share First Impressions
New IASB Chair Andreas Barckow will address delegates at the World Standard-Setters Conference to be held on September 27-28, his first major speech in the role and therefore one likely to draw public interest. Barckow took up the chair post on July 1, months after the board issued a consultation document to generate public comment about its a new five-year agenda for developing IFRS standards. He will “share his first impressions of joining the Board from the perspective of a former national standards-setter,” according to a July 5 board alert. Barckow is the former president of the Accounting Standards Committee of Germany (Deutsches Rechnungslegungs Standards Committee e.V.) The World Standard-Setters Conference provides an opportunity for national standards-setters around the globe to get an update on and discuss the IFRS Foundation’s activities, including proposals and discussion papers currently out for comment.
Feedback Sought on Draft of Core and Disciplines of Planned New CPA Exam
As the AICPA works to launch a new Uniform CPA Exam and a new model for licensure in 2024, it is asking interested parties to provide feedback on the draft content proposed in the new Core and Disciplines CPA Examination structure. “This request for input is the next step in the CPA Examination Practice Analysis, which is designed to determine the knowledge and skills that newly licensed CPAs need to protect the public interest under the CPA Evolution licensure model,” the AICPA said in a July 7 statement. To give feedback on the preliminary content, the AICPA has posted an online survey, which is expected to take 20–25 minutes to complete. The survey ends on September 7. The accounting profession’s input will help the AICPA in developing the new CPA Exam blueprints and Exam design. This in turn will then be published as an exposure draft for comment, planned for July 2022. The AICPA said that the CPA Evolution is a joint initiative with the National Association of State Boards of Accountancy (NASBA), and it is intended to transform the CPA licensure model and respond to the rapidly changing skills and competencies the accounting profession requires. Under this new licensure model, CPA candidates will be required to take three core sections that assess the knowledge and skills that all newly licensed CPAs need to have: accounting, auditing and attestation, and taxation.