Accounting Standards | September 9, 2026
FASB OKs New Standard That Tightens Investment Company Fair Value Reporting
The <a href="https://bitcomme.com/japanese-yen-turbulence-continues-to-threaten-global-financial-markets/” title=”Japanese yen turbulence continues to threaten global financial markets”>Financial Accounting Standards Board says the new standard improves how investment companies, such as mutual funds, measure the fair value of an equity security that’s subject to a contractual sale restriction.
The Financial Accounting Standards Board issued an Accounting Standards Update on Wednesday that the board says improves how investment companies, such as mutual funds, measure the fair value of an equity security that’s subject to a contractual sale restriction.
Under current U.S. GAAP, a contractual restriction on the sale of an equity security isn’t considered when measuring the fair value of that security. Thus, an entity holding a restricted equity security and an entity holding an unrestricted equity security issued by the same investee generally would measure fair value using the market price of the unrestricted security.
Stakeholders told the FASB that applying current guidance can overstate the net asset value reported by investment companies, distort performance reporting and management fees, and create different outcomes for purchasing, redeeming, and remaining shareholders.
