FASB proposal would guard private companies’ proprietary information

BY KEN TYSIAC

Stakeholders have expressed concerns to FASB that certain disclosure requirements for nonpublic employee benefit plans would reveal sensitive proprietary information of private companies.

FASB is addressing that concern by proposing an indefinite deferral of the effective date for certain disclosures about investments held by a nonpublic employee benefit plan in the plan sponsor’s own equity securities.

Comments are sought by May 31 on FASB’s website on Proposed Accounting Standards Update (ASU), Fair Value Measurement (Topic 820): Deferral of the Effective Date of Certain Disclosures for Nonpublic Employee Benefit Plans in Update No. 2011-04.

Stakeholders have been concerned that proprietary information about private companies would be divulged through the dissemination of their employee benefit plans’ financial statements on the plan regulator’s website.

The deferral is proposed to allow time for regulators and stakeholders to discuss the specific quantitative disclosures and their potential effect on the plan sponsor as a result of making that information public. The proposed deferral would be effective when the final ASU is issued. The ASU is expected to be released in June.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

Where to find February’s flipbook issue

The Journal of Accountancy is now completely digital. 

 

 

 

SPONSORED REPORT

Get Clients Ready for Tax Season

This comprehensive report looks at the changes to the child tax credit, earned income tax credit, and child and dependent care credit caused by the expiration of provisions in the American Rescue Plan Act; the ability e-file more returns in the Form 1040 series; automobile mileage deductions; the alternative minimum tax; gift tax exemptions; strategies for accelerating or postponing income and deductions; and retirement and estate planning.