The FASB recently issued a new standard to improve an area of financial reporting for nonpublic business entities that issue equity-classified share-based awards.
Many private companies issue equity-classified share-based awards as compensation to employees and nonemployees. When determining these awards, companies often use a valuation technique such as an option-pricing model.
The new standard allows private companies the option to elect a practical expedient to determine the current price input of equity-classified share-based awards given as compensation using the reasonable application of a reasonable valuation method. Learn more.