FASB Calls for Expensing of Equity Compensation

First reported: April 12, 2004

The Financial Accounting Standards Board (FASB") released its long-awaited exposure draft calling for expensing of options as compensation, entitled Share-Based Payment--An Amendment of Statements No. 123 and 95". As widely expected, the draft would eliminate the ability to account for employee options using APB Opinion No. 25, Accounting for Stock Issued to Employees, and generally would require instead that option grants be accounted for using a fair-value-based method. FASB plans to hold several public roundtable meetings with constituents to discuss issues related to the draft, one of which will be held in the San Francisco Bay Area towards the end of the comment period. The comment period ends June 30, 2004. The release can be read on the FASB's website at http://www.fasb.org/draft/ed_intropg_share-based_payment.shtml .

(Source: 2005 The State Bar of California)


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