SEC and Senate clash over share option standard
The head of the US Securities and Exchange Commission has hit out at plans by the US Senate to block plans to expense share options to the balance sheet.
In a letter to Senate majority leader Bill First, SEC chairman William Donaldson argued that the decisions on stock options should be left to the Financial Accounting Standards Board.
‘I believe strongly that FASB’s consideration of this proposed standard regarding stock options should be allowed to run its full course,’ wrote Donaldson.
The Senate is currently considering proposals to water down the standard so that only the shares of a company’s top fives executives would be expensed.
Such a move could damage moves towards global convergence of standards, with the International Accounting Standards Board requiring all share options to be expensed.