Kansas City, Mo. (Sept. 12, 2002) -- Tax prep and financial services giant H&R Block Inc. said it plans to start expensing the cost of stock options in its next fiscal year.
Block joins dozens of other firms, including Coca Cola, Neuberger Berman Inc. and American International Group Inc., who believe the change will help restore confidence in financial reporting amid widespread corporate accounting scandals.
Block said it can't yet determine the financial effect of expensing stock options in fiscal 2004 because it is still evaluating accounting methods for stock option costs and waiting for further clarification from the Financial Accounting Standards Board. The company said it could delay implementation of the change until it receives clarification on the issue from the FASB.
Block said that in fiscal 2002 the cost of its stock options would have been 18 cents per basic and diluted share. If it had expensed stock options in fiscal 2002, Block's basic earnings per share would have been $2.19, compared to the $2.38 it reported.
Current standards governing stock option accounting encourage, but don’t require, corporations to treat employee stock options as expense items in their financial statements. The FASB, which abandoned plans for mandatory stock option expensing amid backlash from the business community and Congress, plans to revisit the hot button issue.
--Electronic Accountant Newswire staff
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