CFA Institute supports FASB and SEC on stock options
29 Mar 2005
In a letter to the chairs of the US SEC and FASB, the president of the CFA Institute urged those organisations "to proceed with the planned implementation of the new stock option expensing rules as embodied in FAS 123(R)....
The question of how to value stock options is not a valid reason to avoid taking an expense. The issue of stock option expensing has been studied and debated for decades. Refinement of valuation models has occurred over a similar time span by industry experts, Nobel Prize winners and accounting leaders. It is a simple fact that such calculations will never be an exact science. Neither is the estimate of depreciation. Yet, standard methodologies are working well under IASB rules, are being used voluntarily by over 900 U.S. firms already and represent a dramatic improvement over no expensing. |