CFO.com offers this article–“Expensing Options: Better Now Than Later: Study claims many companies will be hurt by waiting for FASB to act?“–by Lisa Yoon. The article refers to a study by Buck Consultants which you can read about here. The study reports on the negative impact of the “wait and see” approach to stock option expensing. According to this press release, the study has this finding:
“High technology companies forced to adopt stock option expensing guidelines in 2004 will experience a median decrease in fiscal year 2003 earnings per share (EPS) of approximately 20 times greater than companies that voluntarily adopt these guidelines before a December 2003 deadline.”
CFO.com’s article makes a good point though about the pending legislation which would put a three year moratorium on stock option expensing if the legislation ever makes its way through Congress. You can read about this legislation here.
More about stock option expensing here . . .