As expected, the Securities and Exchange Commission issued guidelines employee stock option expensing. The guidance, Staff Accounting Bulletin No. 107, "Share-Based Payment," supports the option-expensing rule released in December by the Financial Accounting Standards Board. The guidelines offer companies several models from which to choose when estimating the fair value of employee options. The rule, which requires SEC issuers to treat employee stock options as a business expense, will take effect in July. Currently, publicly held companies can either treat options as an expense, or record the costs in footnotes. "The views expressed by the staff are guidance and do not alter any conclusions reached by FASB in Statement 123R. We will continue to monitor implementation of Statement 123R and will consider the need for additional guidance as necessary," SEC chief accountant Don Nicolaisen said in a statement.

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