The Securities and Exchange Commission voted to delay the effective date of a Financial Accounting Standards Board rule that requires companies to treat employee stock options as expenses.

The decision means that companies that report earnings on a calendar year have another six months before they must start treating options as expenses. The delay gives companies until the start of their first fiscal year after June 15, 2005. Under the Financial Accounting Standards Board's rule, expensing would've started with the first fiscal quarter after that date.

"Feedback from public companies, accounting firms and others...indicated that implementing Statement No. 123R in a period other than the first quarter of a fiscal year potentially could make compliance more complicated for companies and comparisons of quarterly reports more difficult," SEC chief accountant Donald T. Nicolaisen said. "Concerns also were raised that the accounting staffs at companies and accounting firms already have been stretched thin by other compliance responsibilities, such as internal controls reporting."

Nicolaisen added, "Implementing the new standard at the beginning of a fiscal year allows companies to change their accounting systems in a more orderly fashion, and should allow auditors to conduct more consistent audit and review procedures."

Companies can opt to adopt the rules earlier.

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