FASB May Delay Rule on Expensing Stock Options

The U.S. Financial Accounting Standards Board may consider delaying a rule requiring stock options to be expensed because companies face deadlines to implement other rules.

“We may need more time,” FASB Chairman Robert Herz said at a news conference at the regulator’s Norwalk, Conn., headquarters. “We are hearing people say they are stretched to the maximum.”

Companies already face a year-end deadline for putting in place new financial control systems under the Sarbanes-Oxley Act of 2002.

FASB’s options-expensing rule has been opposed by technology companies, which are among the largest users of the stock grants.

Herz made his comments after a roundtable discussion of investors, executives and accounting-industry officials.

“Everyone is on very tight timetables right now,” David Kaplan, a managing director at PricewaterhouseCoopers, said in an interview. “We are recommending the proposal be pushed back six to 12 months.”

Donald Nicolaisen, chief accountant for the Securities and Exchange Commission, said FASB should consider waiting until 2006 to make options expensing a requirement because companies and auditors were busy complying with Sarbanes-Oxley.