By John S. McClenahen Unless Congress or the U.S. Securities & Exchange Commission intervenes, large manufacturers and many other publicly traded companies will have to account for the cost of stock options, restricted shares, performance-based awards, share appreciation plans and employee share plans as expenses on their financial statements beginning next June 15, according to a new standard published Dec. 16 by the Norwalk, Conn.-based Financial Accounting Standards Board (FASB). Smaller companies will have until Dec. 15, 2005, before they must follow the new accounting rule. Previously, companies could mention the cost of stock options and other share-based payments in the footnotes to the financial reports but did not have to account for them as expenses in their financial statements. By one estimate, about 750 publicly traded companies in the U.S. voluntarily expense share-based payments on their financials. They include ExxonMobil Corp., Ford Motor Co., General Electric Co. and General Motors Corp. Since it will effectively reduce their reported profits, the new rule will not be popular among high-tech firms that continue to use stock options as a means of attracting and retaining talented employees. Not surprisingly, however, the FASB's action is just fine with Sen. Carl Levin, D-Mich., a leading Congressional proponent of expensing share-based payments. "Requiring stock options to be treated the same way as all other forms of compensation will strengthen the accuracy of U.S. financial statements, boost investor confidence in U.S. financial reporting, and help end stock-option abuses linked to excessive executive pay, misleading accounting, and nonpayment of taxes by profitable corporations," he said.