The Financial Accounting Standards Board has issued a proposal to defer indefinitely the effective date for certain disclosures about investments held by a nonpublic employee benefit plan in the plan sponsor’s own equity securities. 

FASB’s proposal seeks to address stakeholder concerns about certain disclosure requirements that would potentially provide proprietary information about private companies through the dissemination of their employee benefit plans’ financial statements on the plan regulator’s Web site. The deferral would allow time for discussions between regulators and stakeholders about the specific quantitative disclosures and their potential effect on the plan sponsor as a result of making that information public.

The amendments in the proposed update would defer indefinitely the effective date of certain required disclosures in Update 2011-04 (Topic 820) of quantitative information about the significant unobservable inputs used in Level 3 fair value measurement for investments held by a nonpublic employee benefit plan in its plan sponsor’s own nonpublic entity equity securities. The amendments in the proposed update would not defer the effective date for those certain quantitative disclosures for other nonpublic entity equity securities held in the nonpublic employee benefit plan or any qualitative disclosures.

FASB is asking stakeholders to provide comments on proposed Accounting Standards Update, Fair Value Measurement (Topic 820): Deferral of the Effective Date of Certain Disclosures for Nonpublic Employee Benefit Plans in Update No. 2011-04, by May 31, 2013. 

The proposed deferral would be effective upon issuance of the final update, which is expected to be issued in June. The proposal is available on FASB’s newly redesigned Web site at www.fasb.org.

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