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FASB Delays Start Date For Expensing Stock Options

Tammy Whitehouse | October 19, 2004

Last week, the Financial Accounting Standards Board delayed the effective date of its intended stock option expensing requirements by six months, giving compliance-weary companies and auditors more time to digest and implement new standards. At the same time, FASB members also reviewed and rejected a proposal issued by a handful of technology companies regarding how stock options should be valued.

While FASB was originally on course to adopt the stock option expensing standard by year’s end and put it into effect immediately, the Board decided at its Oct. 13 meeting to delay the effective date until after June 15, 2005. A FASB spokesman characterized the decision as “a difficult balancing act.”

The FASB has been under fire on all fronts over the expensing of stock options. Investor advocates want options expensed as soon as possible to give investors a better picture of financial performance. Opponents have argued expensing will hamper their...

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