FASB hands down final options rule Norwalk, Conn. -- At long last, the Financial Accounting Standards Board has issued its final rule mandating that companies expense at fair value the stock options that they grant to their employees. The rule, years in the making, moves options from the footnotes of companies' financial statements and onto their income statements as an expense. It also brings U.S. rules in line with similar rules issued recently by FASB's overseas counterpart, the International Accounting Standards Board.
Adoption of Statement No. 123, Accounting for Stock-Based Compensation, could have a major impact on the earnings of companies that grant stock options extensively or that tend to have volatile stock. It will also put the valuation methodologies that they use under scrutiny by auditors and regulators.
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