Norwalk, Conn. -- At their meeting here today, members of the Financial Accounting Standards Board voted to give public companies another six months to implement the board's proposed standard for expensing employee stock options.

After weighing input from preparers who said that they needed more time to meet the demands of Sarbanes-Oxley, FASB agreed to delay by six months the effective date for public companies to implement the controversial proposal that would require companies to expense the value of the stock options that they grant to their employees.

"What the board had to weigh up was the consideration of how the investor community was eager to have the effective date as soon as possible, whereas preparers felt they needed more time in order to implement any new standard," FASB spokesman Steven Getz told WebCPA. "What ended up influencing the decision, in part, was that the board felt that companies are feeling a lot of pressure to implement Sarbanes-Oxley 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 felt that delaying the effective date by six months is the best position to take."

Among those who have publicly expressed support for delaying implementation of the rule is Securities and Exchange Commission chief accountant Donald Nicolaisen, who noted that companies and auditors are busy putting in place new financial control systems to meet the SOX requirements.

The board's exposure draft, issued in March, proposed an effective date for public companies for fiscal periods beginning after Dec. 15, 2004. But on Wednesday, accounting rule makers decided that the proposed rule should become effective for fiscal periods beginning after June 15, 2005. The effective date for non-public companies, proposed in the exposure draft to be a year after the date for public companies, remains to be determined, according to Getz, who said that the board will address that issue at a future meeting.

FASB also agreed to allow for modified retrospective application going back to the beginning of the fiscal year for companies that wish to implement the rule early.

Getz said that the board is still on track to issue its final statement by year's end. "It could be as early as the end of November or as late as the beginning of December," he said.

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