Stock option reform is next on the list of ways to fix the world of corporate accounting.
Federal Reserve Chairman Alan Greenspan this week urged U.S. regulators to overhaul the ways companies account for stock options, saying the Enron mess highlights the need to make such issues transparent.
The current rules do not require companies to list stock options granted to officers as expenses, keeping millions of dollars off the balance sheets, and according to Greenspan, distorting a company’s true financial picture.
Greenspan said the way stock options are treated is vitally important – and will continue to be as this form of compensation grows.
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