Following its earlier decision to delay the implementation of a proposed standard to mandate stock option expensing, members of the Financial Accounting Standards Board decided that the standard will apply to private companies and small business issuers for fiscal years beginning after Dec. 15, 2005, as originally planned.

At its Oct. 19 meeting, the board decided that all nonpublic entities and small business issuers would be required to apply the final statement for fiscal years beginning after Dec. 15, 2005 - the same as the original effective date for non-public companies proposed in the exposure draft released in March of this year -- a year after the date for public companies.

Earlier last month, after weighing input from preparers who said that they needed more time to meet the demands of Sarbanes-Oxley, accounting rule makers had voted to delay by six months the effective date for public companies, making the proposed rule effective for fiscal periods beginning after June 15, 2005.

A FASB spokesman told WebCPA that the board's decision to delay the rule for public companies was due in part to concerns over the pressure on companies to implement SOX Section 404 for the first quarter, combined with the fact that the board wanted to be sure to give companies sufficient time to absorb the new standard and to apply it appropriately. The board is expected to issue its final statement by the end of the year.

The controversial proposal would require companies to expense the value of the stock options that they grant to their employees. FASB also agreed last month to allow for modified retrospective application going back to the beginning of the fiscal year for companies that wish to implement the rule early.

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