PCC Addresses Priority Private Company Issues in Q2
This update summarizes the Private Company Council (PCC) activities for the second quarter of 2026. During its June meeting, the council prioritized improving financial disclosures for Employee Stock Ownership Plans (ESOPs) and targeted lease accounting simplifications for private companies, and discussed FASB's decision to add a project on subjective acceleration clauses and debt default disclosures.
By Jere Shawver, PCC Chair
I am pleased to update TXCPA members on the Financial Accounting Standards Board's Private Company Council (PCC) activities during the second quarter of 2026. At our most recent meeting in June, the PCC discussed two current research projects that emerged from our structured agenda prioritization process: employee stock ownership plans (ESOPs) and lease accounting simplifications. The PCC also discussed its overall agenda priorities and advised the Financial Accounting Standards Board on several FASB projects.
ESOPs
After adding ESOPs as a research area at its March 2026 meeting, PCC members began a more in-depth discussion of the topic at the June meeting. The discussion included an educational session led by representatives from Forvis Mazars on the current ESOP landscape, as well as consideration of recent stakeholder feedback and future research and outreach activities.
Members discussed financial statement users’ needs for enhanced information about repurchase obligations, concerns about significant estimation assumptions and diversity in applying existing guidance.
Members supported focusing future efforts on better understanding users’ informational needs, exploring objective and auditable disclosures related to repurchase obligations, and evaluating whether education or implementation support could promote more consistent application of the guidance.
Lease Accounting Simplifications
In collaboration with the PCC’s leases working group, the PCC is continuing its research to determine whether there are opportunities to further simplify the accounting guidance on leases for private company lessees.
Specifically, PCC members supported conducting additional outreach on:
Lease modifications;
Embedded leases; and
Lease classification criteria.
Reassessment of Agenda Priorities
PCC members considered whether certain topics from the 2025 FASB Invitation to Comment-Agenda Consultation that the Board did not add to its technical agenda include private-company-specific financial reporting issues. The PCC will continue to monitor topics not added to the Board’s technical agenda for private-company-specific financial reporting issues and is expected to reassess its agenda priorities later this year.
Discussion of FASB Projects
The PCC discussed several FASB projects, including two that are discussed in more detail below: subjective acceleration clauses and debt default disclosures, and the definition of common control.
Subjective Acceleration Clauses and Debt Default Disclosures. After conducting significant research and outreach, the PCC recently recommended that FASB add a project to its technical agenda on subjective acceleration clauses in determining the classification of debt as a current or noncurrent liability in a classified balance sheet because the issues are not unique to private companies.
At its June meeting, the PCC discussed the Board’s decision to add the project to its technical agenda and its recent tentative decisions, most of which aligned with the PCC’s recommendations. PCC members also discussed the Board’s tentative decision to propose expanded disclosures on events of default.
We encourage TXCPA to submit a comment letter to FASB once the proposed Accounting Standards Update is issued later this year.
Definition of Common Control. PCC members observed that transactions between entities under common control (including those involving family relationships) are prevalent in private companies and that the underlying transactions can be complex. Members emphasized the importance of professional judgment and considering specific facts and circumstances in applying the definition of common control to avoid potential unintended consequences.
The PCC also discussed several FASB projects including indexation-debt and equity, cash equivalents disclosures, digital assets, and the equity method of accounting.
Recent Town Hall at AICPA ENGAGE Conference
PCC members held a town hall-style forum at the AICPA ENGAGE Conference in June 2026 in Las Vegas. We received valuable feedback from conference attendees and appreciated the opportunity to participate in the conference and hear participants’ perspectives directly.
The next PCC meeting is scheduled for September 28-29, 2026, in Norwalk, CT. During that meeting, the PCC will meet with the AICPA Technical Issues Committee.
Concluding Thoughts
I encourage TXCPA members to share input on the PCC’s current research projects or ideas for future agenda priorities by contacting Jenifer Wyss, PCC Coordinator, at jjwyss@fasb.org. Those interested in becoming more involved as a PCC member or PCC working group member, or in providing feedback on other FASB or PCC initiatives, may also reach out through the Contact Us portion of our webpage.
Additional information about our work is available on our webpage at www.fasb.org/pcc and in the PCC's 2025 Annual Report.
About the Author: Jere Shawver serves as Chair of the Private Company Council. He has over 40 years of experience advising companies on financial reporting, accounting and business matters, across a wide range of industries, including manufacturing and distribution, construction and real estate, higher education, hospitality, government contracting, and technology. He retired in May 2025 as Chief Executive Officer of Baker Tilly US, LLP, where he was responsible for managing the assurance practice and risk management, including the Office of the General Counsel.
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.
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