Institute Supports FASB Stock Option Disclosure Proposal

Washington, DC, November 13, 2002- The Institute supports a proposal by the Financial Accounting Standard Board (FASB) that would require corporate issuers to include a tabular presentation displaying the effects of expensing stock options on income, compensation expense, and earnings per share in their financial statement footnotes.

In a letter to FASB, the Institute's letter also supports the proposal's requirement to include the tabular presentation in quarterly financial statements rather than annually, noting that the increased frequency will provide investors with more timely access to stock option information. The proposal also provides companies voluntarily electing to expense stock options with additional methods to implement the transition to expense treatment.

In a previous comment letter, the Institute urged FASB to adopt a new accounting standard that would require issuers to treat stock options as an expense and ensure uniformity in how stock options are valued for this purpose.