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Another Congressional letter to FASB on stock options

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15 Mar 2003

A bipartisan group of 15 US Senators – including a former accountant and the Senator who led the Congressional opposition to FASB's proposal to expense stock options in the early 1990s – have Written to FASB (PDF 808k) urging enhanced disclosures, coupled with shareholder approval of all stock option plans, rather than mandatory expensing.

They also said that the deliberation process currently underway is "basically flawed".

Investors need accurate, reliable and meaningful information to make informed investment decisions. Accounting rules should reflect accounting principles that are generally accepted within the accounting profession, especially those that promote the disclosure, transparency, comparability and reliability of financial statements.

We believe a mandatory expensing standard – such as that proposed by the International Accounting Standards Board and apparently which is under consideration by the FASB – may not meet these important tests.... A mandatory expensing standard will not give investors accurate or reliable information – instead, they will get exactly the opposite.

See also our earlier news story of 19 February 2003.

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