FASB to Defer Disclosures of Stock Valuations for Benefit Plans

It will issue an exposure draft to exempt or indefinitely defer for nonpublic employee benefits plans (i.e., plans other than those subject to the Form 11-K filing requirements of the Securities and Exchange Commission) the requirement to provide certain disclosures about the fair value of investments in private company equity securities of the plan sponsor. FASB will expose for public comment a proposal to indefinitely defer the requirement that a nonpublic employee benefit plan disclose the quantitative fair value information required by paragraph 820-10-50-2(bbb) for investments in private company equity securities of the plan sponsor, regardless of what other private company equity securities are held by the nonpublic employee benefit plan.   

The proposal is expected to be issued in the beginning of May to provide a comment period extending through May 31.   

FASB’s decision was based on concern that the disclosures would have exposed privately held companies’ confidential information to the general public on the Department of Labor’s website, since employee benefit plans with 100 or more participants are subject to audit under the Employee Retirement Income Security Act (ERISA). The National Center for Employee Ownership (NCEO), the Employee-Owned S Corporations of America (ESCA), and the ESOP Association argued in a joint letter to FASB that making such information broadly available would harm companies by exposing them to hostile takeovers and litigation.