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SEC delays stock option compliance date

  • United States (old) Image

15 Apr 2005

The US Securities and Exchange Commission has deferred the compliance dates for FASB Statement 123 (revised 2004), Share-Based Payment.

Under FAS 123R, registrants would have been required to implement the standard as of the beginning of the first interim or annual period that begins after 15 June 2005 (after 15 December 2005 for small businesses). For a calendar year-end company, this would have meant initial adoption of FAS 123R in their third quarter 2005 reports.
The Commission's new rule allows companies to implement FAS 123R at the beginning of their next financial year that begins after 15 June 2005 (15 December 2005 for small businesses). An SEC registrant other than a small business with a 30 June 2005 year-end, however, must comply with FAS 123R starting with its interim financial statements for the quarter beginning 1 July 2005. The Commission's new rule does not change the accounting required by FAS 123R – only the dates for compliance with the standard. FAS 123R, like IFRS 2, requires companies to recognise the fair value of stock options given to employees as compensation expense. IFRS 2 went into effect on 1 January 2005. Click for (PDF 29k).


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