The proposals reissued for consultation last month by the International Accounting Standards Board could make companies book the value of share options as an expense in the profit and loss account.
ProShare, an independent not-for-profit organisationthat promotes wider share ownership, established the group which includes some of the UK’s leading finance directors with the aim of feeding into the debate at a national and international level.
Among the ten member group are John Coombe, chief financial officer of GlaxoSmithKline, Geoffrey Dunn, finance director of Xansa, an IT consulting company and Andrew Given, finance director at Logica, the software and IT consultancy.
David Hammond, chairman of the ProShare group, said: ‘This is a critical issue for European business. If proposals are adopted in the EU alone they will place EU companies at a distinct competitive disadvantage.’
‘Whilst international standards are something which we should strive for they can in reality be Utopian, unrealistic and impractical.’
Coombe, who is a board member on the UK Accounting Standards Board, last month told AccountancyAge.com that it would be a ‘disaster’ for UK plc if the move was not mirrored internationally. He also said valuation should be based at the date the options were granted, not vested.
Mary Keegan, ASB chairman, has previously welcomed any input from ProShare and has always emphasised that the UK will not go it alone.
However, a European ruling has stated that all European listed companies must adopt global rules by 2005.
The growing number of companies offering not only employees but also external advisers and suppliers share options as a way of payment has led the global standard setter to take up the challenge. The IASB is currently working on the development of a rule on share options.
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