The Financial Accounting Standards Board has issued its much-anticipated guidance indicating companies may follow long-standing practice in setting the grant date for employee stock option awards. And while the guidance is giving companies cause for relief, it’s making accountants feel as if they’re walking on a tightrope.
The guidance, issued as a proposed staff position, is titled “Practical Exception to the Application of Grant Date as Defined in FASB Statement No. 123(R)” (available from box at right). It says companies can do as they’ve done for years, which is to set the grant date for a stock option award as the date a company’s board of directors or compensation committee approves the award, as long as employees are notified in short order and the award is non-negotiable.
