An expense is recognised when the goods or services received are consumed. The FASB's proposals are generally similar to the accounting requirements in IFRS 2, though FASB would permit nonpublic (unlisted) entities to elect to use either (a) the fair-value-based method or (b) the intrinsic value method with final measurement of compensation cost at settlement date. Under the intrinsic value method, compensation cost is recognised at grant date only if the exercise price of an option is below the market price at that date. Current US GAAP (FASB Statement 123) allows companies to choose either to recognise the fair value of stock options and other share-based payment as expense or to disclose those fair values in the notes. Nonpublic entities may measure at "minimum value", which excludes a volatility factor, rather than fair value. Click for FASB News Release (PDF 18k). You can download the exposure draft from FASB's Website. Comment deadline is 30 June 2004.