PracticeConsultingShare options debate reopened

Share options debate reopened

Controversial proposals to make companies book the cost of offering employees share options was this week re-issued for comment.

At its monthly board meeting in September, the International Accounting Standards Board decided to redistribute the discussion paper ‘Accounting for Share based payment’ now that the topic is being dealt with at a global level.

Moves to force companies to book share options as an expense in their accounts have been met with vehement opposition from leading companies. In the UK companies such as QXL, Logica and Pace Micro Technology have voiced their opposition to the plans.

But the realisation that no one country in isolation would be able to successful implement the rule and the surge in the trend, particularly among dotcom companies, to offer share options to employees, external advisers and suppliers, has led the global standard setter to take up the challenge.

David Tweedie, IASB chairman, said: ‘The calls from users of financial statements for improvements in accounting for these transactions; and the differing proposals emanating from national standard-setters demonstrate the importance of developing a high quality global accounting standard on share-based payment.’

In particular, the IASB wants to hear views on measurement and where in the accounts to put the cost of share options.

Tweedie added: ‘There are, however complex issues for the board to consider… how we can measure the value of employee share options’

The proposals, originally developed by the now defunct group of standard setters from English-speaking countries called G4+1 and the IASB’s predecessor, the IASC, were published for discussion in July 2000.

Links

Share options talk moves up a gear

Companies toughen stance on options

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