FASB should focus on Enron-style reforms

Speaking in a personal capacity Herdman is reported to have said the Financial Accounting Standards Board should not disrupt its attention. ‘FASB’s got its hands full,’ he said.

Rather Herdman called on the FASB to deal with special-purpose vehicle entities, such as those used by Enron to hide massive liabilities, resulting in the gas company’s eventual collapse.

Stock option accounting has come into the public interest after Coca-Cola said it would account for them as expenses on the balance sheet instead of just as a footnote.

Herdman, speaking to the FT said the debate of stock options had continued throughout the 1990s, but no method of measurement could be agreed upon.

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