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FASB makes some stock compensation decisions

  • FASB (old) Image

11 Sep 2003

At its meeting yesterday, the US Financial Accounting Standards Board agreed to delay issuance of an exposure draft on stock-based compensation until the first quarter of 2004. The FASB also expressed a preference for using a specific mathematical model – known as the binomial model – to measure the fair value of employee share options because that model is better able to take into account such factors as performance conditions and vesting and holding periods than is the Black-Scholes model.

The IASB's ED 2, Share-Based Payment, would not prescribe any particular model. The IASB's current timetable calls for issuing a final IFRS in the first quarter of 2004.

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