The Securities and Exchange Commission is reportedly expected to change the effective date for new stock option accounting rules that will require companies to include employee stock-option compensation as an expense on their earnings reports, giving most U.S. companies a six-month reprieve.
An announcement of the SEC's decision could come as early as this week, The Wall Street Journal reported Wednesday, citing "people familiar with the matter."
The controversial new rules, handed down by the Financial Accounting Standards Board last December, are currently set to take effect for fiscal quarters beginning after June 15.
According to the Journal, the SEC's staff has recommended that SEC commissioners vote to change the deadline, so that the rules instead would take effect for fiscal years starting after June 15, pushing back by six months the required effective date for U.S. companies whose next fiscal years begin Jan. 1, 2006. Companies could still opt to adopt the new rules voluntarily before their respective deadlines.
SEC staff members -- including Donald Nicolaisen, the agency's chief accountant, and Alan Beller, director of the SEC's division of corporation finance -- have been pressing for the change to allow more companies to devote additional time and resources toward understanding the new rules' requirements, according to the report.
The recommendation to delay the rules' effective date reportedly has the support of SEC Chairman William Donaldson, and is expected to be approved unanimously by the five commissioners without a public meeting, the Journal said.
If approved, the delay would mark the second time the effective date has been pushed back. FASB members back in October voted to delay the rules' effective date by six months under pressure from preparers, who said that they needed more time to meet the demands of Sarbanes-Oxley.
