FASB was still explaining in a recent press release its 1995 standard of stock options and also tentatively approving three different transition methods for reporting stock options as well as adding additional disclosure rules for such options under that standard.
In the release, it readily admits it didn't adopt the best approach in FASB Statement No. 123, Accounting for Stock-Based Compensation. "When the FASB developed FAS 123 in the mid-1990s, the Board proposed requiring that treatment because it believed that this was the best way to report the effect of employee stock options in a company’s financial statements. The FASB modified that proposal in the face of strong opposition by many in the business community and in Congress that directly threatened the existence of the FASB as an independent standard setter."
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