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SEC Commissioner: US look to IASB progress on stock options

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30 Apr 2002

In a speech to the American Bar Association, US SEC Commissioner Isaac C.

Hunt suggests that failure to expense the cost of stock options could result in "more capital being invested in companies that on the surface appear to be high growth earnings companies because their labor costs are not fully reflected in their financial numbers". He notes, however, that the FASB has "many more important priorities that must be addressed before it can reexamine accounting for option compensation. For example, accounting for special purpose entities and revenue recognition issues must be FASB priorities." Because the International Accounting Standards Board is currently examining this issue, Commissioner Hunt suggest that "it very well may be prudent to see what they come up with before FASB or the Commission address this issue." Link to (PDF 62k).

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