FASB Approves Expensing of Stock Options
Last month, 15 U.S. Senators sent a comment letter  saying that FASB’s decision-making process is "fundamentally flawed." The legislators asked the board to reconsider its position, arguing that expensing stock options would give investors inaccurate information.
Another critic of expensing is the International Employee Stock Options Coalition (IESOC), a coalition of trade associations and companies, including Financial Executives International, NASDAQ, and the National Association of Manufacturers. IESOC says that FASB is making a "rush to judgment," and has failed to consider alternative approaches. IESOC contends that a switch to expensing will hurt U.S. innovation and entrepreneurship.
Over the years, one of the most vocal opponents to expensing options has been the high-tech industry, which relies on generous stock option plans to attract and retain workers. But even that industry is feeling heat from investors. On April 24, Apple Computer shareholders approved a non-binding proposal to have the company expense options. It’s the first high-tech company to pass such a measure in Silicon Valley.
The debate on stock options isn’t just focused in the United States. Last July, the International Accounting Standards Board voted  to publish an exposure draft of a proposed international accounting standard that would require the expensing of stock options. A month later, FASB agreed  to consider changing the method of accounting for stock options.