European Union Backs Accounting Rule for Options

On Monday, the Accounting Regulatory Committee (ARC), which advises the European Commission on the adoption of international accounting standards (IAS) in Europe, gave a positive opinion on a Commission Regulation making mandatory the international financial reporting standard (IFRS 2) on share based payments.

This standard belongs to the so-called stable platform of accounting standards which all of the listed European companies adopt as they move to international accounting standards from January 2005.

IFRS 2 requires for the first time that companies reflect in their income statements the effects of share-based payment transactions, including expenses associated with transactions in which share options are granted to management and employees. In the past, those transactions were not recognized in the company’s income statements but were only disclosed in the notes to the accounts. In future, expensing stock options in the income statement will impact on reported earnings.

Following the opinion of the ARC, the European Parliament has one month to consider this issue before the Commission can formally adopt IFRS 2 in January 2005.

You may like these other stories...

A proposal issued by the Governmental Accounting Standards Board (GASB) last week explains how fair value measurement should be defined for state and local government financial reporting.The exposure draft, Fair Value...
By Jason Bramwell The board of trustees of the Financial Accounting Foundation (FAF) finalized a new policy on November 19 that provides the Governmental Accounting Standards Board (GASB) with direction on what...
By Jason Bramwell The Governmental Accounting Standards Board (GASB) is now offering a free online toolkit designed to assist preparers and auditors of state and local government pension plans with implementing new...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.