At its most recent meeting earlier this summer, the PCC dug into two current research projects—employee stock ownership plans (ESOPs) and lease accounting simplifications. Members also revisited the council’s broader agenda priorities and weighed in on several FASB projects.

ESOPs: Taking a closer look at what users need

The PCC’s discussion of ESOPs included an educational session led by representatives from Forvis Mazars, along with a review of recent stakeholder feedback and potential areas for additional research and outreach.

One issue that stood out was the need for better information about repurchase obligations. Members also discussed the significant estimation assumptions involved in ESOP accounting and the fact that existing guidance isn’t always applied consistently.

The PCC believes future work should focus on understanding what financial statement users actually need to know. That includes exploring whether more objective and auditable disclosures around repurchase obligations could help, and whether additional education or implementation support could lead to more consistent application of the guidance.

Can lease accounting be simpler?

Lease accounting remains another area where private companies are looking for practical solutions.

Working with its leases working group, the PCC is continuing its research into whether the accounting guidance for private company lessees can be simplified further.

The group plans to conduct additional outreach on several areas that can create challenges, including lease modifications, embedded leases and lease classification criteria.

The goal is to determine whether there are opportunities to make the guidance easier to apply without sacrificing useful financial reporting.

What should the PCC tackle next?

Looking at the bigger picture, members considered whether topics identified in the 2025 FASB Invitation to Comment—Agenda Consultation, but not added to the Board’s technical agenda, could still present financial reporting issues specific to private companies.

The PCC will continue monitoring those topics and plans to reassess its agenda priorities later this year.

Weighing in on FASB projects

The PCC also discussed a number of FASB projects, including subjective acceleration clauses and debt default disclosures, and the definition of common control.

Subjective Acceleration Clauses and Debt Default Disclosures: After significant research and outreach, the PCC had recommended that FASB add a project addressing subjective acceleration clauses and how they affect the classification of debt as a current or noncurrent liability. The issue, the PCC noted, isn’t unique to private companies.

FASB added the project to its technical agenda at its June meeting, and most of its tentative decisions to date have aligned with the PCC’s recommendations. The Board is also considering expanded disclosures related to events of default.

Once FASB issues a proposed Accounting Standards Update later this year, CalCPA members are encouraged to submit comment letters and share their perspectives.

Definition of Common Control: This is an area particularly relevant to private companies, where transactions involving entities under common control—including family-related entities—are common.

Because these transactions can be complex, PCC members emphasized the importance of professional judgment and carefully considering the specific facts and circumstances. Doing so can help avoid unintended consequences when applying the definition of common control.

Other FASB projects on the PCC’s agenda included indexation–debt and equity; cash equivalents disclosures; digital assets; and the equity method of accounting.

The PCC’s next meeting is scheduled for Sept. 28-29 and will include discussions with the AICPA’s Technical Issues Committee.

Have a perspective? The PCC wants to hear it.

The PCC’s work depends in part on hearing directly from practitioners and other stakeholders. CalCPA members are encouraged to share input on the council’s current research projects or suggest ideas for future agenda priorities by contacting Jenifer Wyss, PCC Coordinator.

Members interested in becoming more involved as PCC members or working group members—or in providing feedback on other FASB or PCC initiatives—can reach out via the PCC webpage.

More information about the PCC’s work is available on its website and in the PCC’s 2025 Annual Report.

The views expressed in this article are those of Mr. Shawver only. Official positions of the PCC and FASB on accounting matters are determined only after extensive public due process and deliberation.