Should employers report an expense for granting employee stock options?
I am not a financial reporting expert. My focus is more in the area of giving tax advice. Since this newsletter focuses on issues relating to employee stock options, I am going to throw in my two cents’ worth. The Financial Accounting Standards Board issued a proposed opinion that employer corporations should report an expense on their financial statements for granting employee stock options. It backed down under severe political pressure, permitting employers to report the information in footnotes instead of on the income statement. The International Financial Accounting Standards Board has said that corporations who list their stock on exchanges in Europe or Australia must start reporting the expense for employee stock options in 2005. So those who are supposed to be the experts in financial reporting have said an expense should be reported for granting employee stock options. The business community, especially high-technology companies, continue to fight reporting this expense, argu
