Years ago, during my rather undistinguished career in scholastic football, I once hurled myself on the top of a mound of players seemingly minutes after the play was whistled dead.
I watched mutely as the referee calmly reached into his pocket and let fly with the inevitable penalty flag that credited the opposing team some 15 yards.
Needless to say, some of my teammates questioned the size of my brainpan, since were trailing late in the game and giving up another touchdown would have basically closed the issue.
But the harshest comments for me were reserved for those unfortunate souls on the bottom of the pile, who, before my knuckleheaded stunt, were already scrunched under more than a half-ton of padded humanity.
Now, many years later, I think I know how they felt.
For sure I know the folks at the Financial Accounting Standards Board know how it feels to be compressed — even if it is metaphorically.
In lieu of jerseys and rough-edged shoulder pads, FASB’s pilers-on are clad in business suits and toil in the House of Representatives.
Some 100 lawmakers have rallied behind H.R. 3574, “The Stock Option Accounting Reform Act,” a measure that was introduced by Rep. Richard Baker, R-La.
Baker’s plan basically dilutes FASB’s recent proposal to treat stock options as an expense, by requiring companies to expense options given to their top five executives, as opposed to the cost of all employee options. It also would prohibit the Securities and Exchange Commission from enforcing FASB’s recent options rule until the regulator “studies” its economic impact.
And considering the glacial pace at which things move in our nation’s capital, how many years would it be before the “study” is considered complete?
Nevertheless, Baker’s plan has quickly garnered bi-partisan support, in particular from those lawmakers who represent areas that are heavily laden with companies that frequently dispense stock options – i.e. California. The proposal will now go before the House Financial Services Committee.
Now I’ll leave technical debates on the most efficient methods of options valuations to far brighter and more experienced minds than myself.
But this recent groundswell not only conjures up unpleasant memories of the stock options imbroglio of one decade ago, but has the potential to establish a dangerous precedent if Congress is allowed to weigh in on accounting standards — particularly if many of their constituents are up in arms over the implications of proposals such as the stock options debate.
And if lawmakers are upset over an accounting standard, will they simply be able to marshall their considerable lobbying forces in an effort to change it?
That’s more than a slightly disturbing scenario and would severely hamper the standard-setting process.
For anyone who follows the profession, you don’t need a penalty flag to see that.
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