FASB Postpones Stock Options Expensing Rule
 
October 18, 2004
 
Mark A. von Bergen- Portland
David Wang - Portland

In what is perceived as a compromise between Board members, the Financial Accounting Standards Board (FASB) has voted to postpone implementation of its rules mandating expensing of stock options.  Originally scheduled to become effective in December 2004, the new rules now will require that public companies expense stock options and other equity awards in periods ending after June 15, 2005.  Implementation of a similar requirement for private companies is expected to be delayed until January 2006, but FASB has yet to vote on the issue.

Attempts by members of Congress to limit or block implementation of the FASB rule altogether continue to face obstacles in the Senate, where Senator Richard Shelby (R-Ala.), chairman of the Senate Banking Committee, has vowed to oppose any effort to undermine FASB’s independence.  However, it remains to be seen how the postponement will affect political pressures, since implementation now will occur several months into the term of a new Congress and, potentially, a new administration. 

For more information e-mail Mark von Bergen or David Wang at mark.vonbergen@hklaw.com or david.wang@hklaw.com, respectively, or call toll free, 1-888-688-8500.