NAM Will Oppose FASB On Stock-Option Accounting

By John S. McClenahen Claiming that putting a value on stock options is "difficult if not impossible" and that treating options as an expense on financial statements is "ultimately unfair to rank-and-file workers," the Washington, D.C.-based National Association of Manufacturers (NAM) vows to fight any attempt by the Financial Accounting Standards Board (FASB) to mandate the expensing of stock options. The FASB voted this week to consider whether the cost of employee stock options must be treated as a business expense. A new accounting rule could take effect by this time next year. Under current rules, the cost of stock options can be estimated in financial footnotes and not listed as an expense on the income statement. "Mandatory expensing of stock options would erode bottom lines and could lead to companies abolishing options except for executives. And that would be unfair to rank-and-file workers who ought to have the same ability to invest in their company's future success," says Kimberly Pinter, NAM's director of corporate tax policy. About 180 U.S. companies, including General Electric Co., General Motors Corp., Dow Chemical Co. and Coca-Cola Co., are now voluntarily expensing the cost of stock options.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish