AICPA - Valuation of privately held company equity securities issued as compensation  

June 12: The AICPA recently issued a practice aid addressing the valuation of privately held company equity securities issued as compensation.

The AICPA practice aid addresses:


  • Considerations for determining the appropriate basis of valuation (e.g., a minority interest subject to current ownership vs. the sale of a controlling interest in an entity)
  • Leading practices for estimating the fair value of privately held company equity securities, based on the company’s stage of development
  • Factors to consider in determining control and marketability adjustments
  • The consideration of private and secondary market transactions in the security in the valuation process
  • Disclosures in the financial statements and management’s discussion and analysis (MD&A) that could be included in an initial registration statement

Read a June 2013 report [PDF 157 KB] prepared by KPMG LLP: Defining Issues: Revenue Recognition: AICPA Issues Practice Aid for Valuation of Privately-Held-Company Equity Securities Issued as Compensation




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