Norwalk, Conn. (May 18, 2004) -- The Financial Accounting Foundation, the body charged with funding oversight and member selection for both the Financial Accounting Standards Board and the Governmental Accounting Standards Board, has come out against the approval of a bill that waters down a FASB proposal to treat employee stock options as an expense.
The bill, H.R. 3574, “The Stock Option Accounting Reform Act,” introduced by Rep. Richard Baker, R-La., would undercut the FASB standard by requiring companies expense the options given to their top five executives, rather than the cost of all employee options. The measure, which has garnered support from roughly 100 bipartisan supporters, will now go before the House Financial Services Committee.
“Advancing this bill in the legislative process harms the credibility of America's system for providing transparent and unbiased financial information to investors,” said Robert Denham, chairman and president of the FAF. “By inserting Congress into the setting of standards for accounting by publicly traded companies, H.R. 3574 would undermine the independence of the FASB."
“Once Congress starts setting accounting standards through its political process, the integrity of accounting standard-setting in this country will be dangerously compromised,” Denham said.
-- WebCPA staff
