Like IFRS 2 Share-based Payment, ED3 proposes to require an entity to recognise compensation expense for stock options issued to employees based on grant-date fair value, spread over the vesting period as consideration for receiving goods or services. ED3 also proposes to require an entity to account for its grant of stock options to non-employees based on the fair value of either the stock options or the goods or services acquired. In the balance sheet, stock options would be presented as 'stock acquisition rights' classified as 'mezzanine' between liability and equity until exercised. ED3 covers equity-settled share-based payment transactions but does not cover cash-settled share-based payment transactions. In addition, ED3 proposes to allow unlisted companies to measure options at their intrinsic value if they cannot reliably estimate fair value. The standard would be effective for financial years beginning on or after 1 April 2006. Comment deadline is 28 February 2005. Here is the Link to the ED in Japanese.