BusinessCompany NewsE&Y does u-turn on stock options

E&Y does u-turn on stock options

In the US, Big Four firm Ernst & Young has changed its tune on expensing stock options, now saying they should be deducted from the bottom line.

Link: IASB share plans ‘off-target’

According to reports from the US, the firm made this call in a letter written to the country’s chief standard setter, the Financial Accounting Standards Board.

At present, listed US companies are not forced to account for stock options on the balance sheet, although a host of big companies already are doing so, in anticipation of such a rule being introduced.

Companies that already book stock options as expenses include Microsoft, Coca-Cola, Amazon and General Electric.

But technology companies, who would be most heavily affected by such a rulechange, are mobilising a lobby against it.

They are most affected because 84% of employees working in this sector are offered stock options as part of their remuneration packages.

According to USA Today Sun Microsystems is collecting testimonials from workers who get stock options.

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