Financial Accounting Blog

Tuesday, April 27, 2004

Stock Options. Can FASB Prevail? An article from the Wharton School at U Penn discusses the debate about employee stock options.
When the Financial Accounting Standards Board (FASB) recently announced it may require companies to recognize the value of stock option-based compensation by expensing the value on the income statement (current regulations permit footnote disclosure in financial reports), it appeared to be ready to resolve a contentious issue. But the proposal has generated a war of words, pitting heavyweights like Alan Greenspan and Warren Buffett – who favor the expense model – against powerful opponents like SEC Commissioner Paul Atkins and Louisiana Rep. Richard Baker, chairman of the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises...