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.