IASB Issues Draft Requiring Options Expensing

The International Accounting Standards Board (IASB) has issued an initial draft proposal to require companies to account for the value of stock options. The proposal would go into effect January 1, 2004. A final version will be put out for comment later this year. The proposal would require companies to value options at the date of grant, but would not require any specific method for determining the value. IASB is a private standard-setting organization based in London with board members from nine developed countries. The European Union will adopt its standards in 2007, Australia in 2005. The U.S. is not bound by these standards, but U.S. companies will now face increasing pressure to expense options.