February 12, 2020 FASB Board Meeting

Tentative Decisions

Disclosure framework: disclosure review—income taxes. The Board discussed comment letter feedback received on its March 2019 revised proposed Accounting Standards Update, Income Taxes (Topic 740): Disclosure Framework—Changes to the Disclosure Requirements for Income Taxes.
 
The Board directed the staff to perform research and outreach on potential alternatives to disclose certain disaggregated income tax information. The Board also directed the staff to perform additional research on various other proposed amendments.
 
FASB endorsement on Private Company Council (PCC) consensus. The Board discussed endorsing the decisions made at the December 16, 2019 PCC meeting on Issue No. 2018-01, “Practical Expedient to Measure Grant-Date Fair Value of Equity-Classified Share-Based Awards.”

Endorsement of PCC Decisions 

The Board endorsed the PCC’s decision to issue a proposed Accounting Standards Update for a practical expedient that would allow a nonpublic entity to use a valuation performed in accordance with certain Treasury Regulations of Internal Revenue Code Section 409A to determine the current price of its underlying share for purposes of determining the grant-date fair value of an equity-classified share-option award. The practical expedient would only reference valuation procedures meeting the rebuttable presumption of reasonableness provisions in the Treasury Regulations of Section 409A.  

The Board also endorsed the following PCC decisions related to the practical expedient:

  1. A nonpublic entity would only be permitted to apply the practical expedient to equity-classified share-option awards issued to employees or nonemployees.
  2. A nonpublic entity would apply the practical expedient on an award-by-award basis.
  3. A nonpublic entity would prospectively apply the practical expedient for all qualifying awards granted during fiscal years beginning on or after the effective date and interim periods within the following years and could adopt the practical expedient early.

The Board and the PCC will determine the effective date after considering stakeholder feedback on a proposed Update.

Comment Period of the Proposed Update 

The Board decided to provide a 45-day comment period, ending no sooner than May 15, 2020.

The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot.