The Financial Accounting Standards Board (FASB) has issued a proposal drafted by the Private Company Council (PPP) that would simplify how private companies determine the fair value of the shares underlying a share-option award on its grant date or modification date. The FASB noted that stakeholders had wanted a simplified approach for private companies because these firms typically do not have actively traded equity shares and so observable market prices for those shares do not exist. The FASB is proposing, as a practical expedient, to allow nonpublic entities to determine the current price of equity-classified share-option awards issued to both employees and nonemployees using the same valuation method prescribed by Section 409A of the Internal Revenue Code. The FASB said that it is expected that an independent appraisal will often be the method used by nonpublic entities electing the practical expedient in the proposal. The proposal is available if you click here, and comments are due by October 1.