Toronto (Dec. 19, 2003) — Canada will ring in the new year by becoming the first major jurisdiction to require expensing for all public company employee stock-based compensation awards.
The Canadian Accounting Standards Board announced it would require public companies to expense all stock-based compensation awards, including stock options, made to employees, senior executives and board members for fiscal years beginning on or after Jan. 1, 2004.
"From the Accounting Standards Board's perspective, there is no doubt that stock-based payments are a form of compensation and should be expensed," said Paul Cherry, chair of the AcSB. "Once these amendments to our existing standard come into effect, investors, analysts and regulators will have financial statements that better reflect the reality of stock-based payment transactions.”
Cherry said AcSB plans to harmonize with the revised standard expected to be issued by the Financial Accounting Standards Board and to converge with a standard to be issued by the International Accounting Standards Board. He noted that the Canadian board may have to remove "nuisance" differences if they exist between the Canadian standard and FASB's planned standard.
— WebCPA staff
