GE adopts new stock options rule
Giant conglomerate General Electric has become the largest US company to date to change its accounting policies and treat stock options as expenses on its books.
GE’s decision, which takes effect from this quarter, means it joins a fast-growing list of high profile companies who have adopted the rule including online retailer Amazon, tech company Computer Associates and beverage king Coca-Cola.
The new accounting rule is unlikely to have a great impact on its bottom line. GE said the decision would reduce 2002 net income by less than 1 cent per share increasing to 3 cents per share over the next three to four years.
The move was made in part to dispel any doubts about the company’s accounts, following sworn statements made by both its chief executive and chief financial officer to the Securities & Exchange Commission that its accounts were true.