The Financial Accounting Standards Board met yesterday to address a myriad of complicated issues surrounding the expensing of stock options. The definitive decision reached at the end of the meeting: delay the issuance of rules by 6-9 months.

FASB has been under pressure from a number of groups, including Congress, to define how companies should expense stock options granted to employees. The sticky point, everyone agrees, is honing in on an appropriate valuation method. The widely used Black-Scholes method has often been criticized as an imperfect tool to value options.

"You can't get through all the way to expensing unless you find a credible, acceptable way to value stock options and that hasn't yet been put forward," said Jeff Peck, who leads the International Employee Stock Options Coalition.

The FASB explored several different models, and for the first time hinted at a model other than Black-Scholes.

One issue that was agreed by the Board is that the valuation of stock options will be based on the contractual life of the option, or the time period until the option expires.

The FASB hoped to have rules in place by the end of 2003, but have now pushed back the target date to the first quarter of 2004 to issue new rules, and the third quarter of 2004 to issue final rules.

Over 350 companies have indicated that they are, or will soon be, expensing stock options, and many are waiting for a valuation decision by FASB before making a move.