SEC Chairman Backs Expensing of Options

From Bloomberg News

Securities and Exchange Commission Chairman William H. Donaldson said he favors treating employee stock options as an expense, adding impetus to an accounting rule change that is being fought by most computer-related companies and some members of Congress.

The Financial Accounting Standards Board, which sets U.S. accounting rules, decided April 22 that options awarded as compensation represent an expense that companies should recognize on their earnings statements, setting up a reprise of the battle the board previously had fought, and lost, with technology firms.

This time the outcome is likely to be different, with the support of people such as Donaldson and Fed Chairman Alan Greenspan.