FASB: Stock Option Expensing Required in 2005
The Financial Accounting Standards Board, in a meeting to discuss the details of its stock-option proposal due early next year, agreed to require the expensing of options beginning in 2005, despite requests from the high-tech sector to delay such a requirement.
Most companies do not expense stock options because of concerns on how it may affect company profits. However, proponents of mandatory expensing have gained momentum from recent corporate governance reforms and the forthcoming final rule on mandatory expensing from the International Accounting Standards Board. Proponents say mandatory expensing gives investors a clearer financial picture of a company.
Final rules on stock-option expensing are scheduled for release in the second half of 2004.
The Financial Accounting Standards Board, in a meeting to discuss the details of its stock-option proposal due early next year, agreed to require the expensing of options beginning in 2005, despite requests from the high-tech sector to delay such a requirement.
Most companies do not expense stock options because of concerns on how it may affect company profits. However, proponents of mandatory expensing have gained momentum from recent corporate governance reforms and the forthcoming final rule on mandatory expensing from the International Accounting Standards Board. Proponents say mandatory expensing gives investors a clearer financial picture of a company.
Final rules on stock-option expensing are scheduled for release in the second half of 2004.
