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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis.

 
 
Apr 18

Written by: Jack Ciesielski
4/18/2005 8:21 AM 

Now that the implementation date for Statement 123(Revised) has been delayed for calendar year firms, there's time for HR 913, the "Broad-Based Stock Option Plan Transparency Act" - a fantastic piece of double-speak - to gather steam in Congress.

The bill is recycled version of the one introduced last year by Rep. David Dreier and Rep. Anna Eshoo of California; it intends to accomplish the same thing, namely to stop the FASB in its tracks from ever getting Statement 123(Revised) into financial statements. How? Look at some of the requirements of the bill:

"[It] directs the SEC to examine and report to specified congressional committees on the effectiveness of the enhanced disclosures required by this Act in increasing transparency to current and potential investors.

[It] prohibits the Commission, between enactment of this Act and submission of such report, from recognizing as generally accepted accounting principles any new accounting standards regarding the treatment of stock options.

[It] directs the Secretary of Commerce to analyze and report to specified congressional committees on broad-based employee stock option plans, particularly in the high technology and any other high growth industries."

In short, it's death by delay. At least some of those tech companies that the Secretary of Commerce will be studying should have been reporting under Statement 123(Revised) soon, given that the SEC's delay of Statement 123 (Revised) didn't affect them.

There are now 40 co-sponsors of the bill; they're listed on this page. If you're represented by any of them, you should drop them a line and offer your discouragement.

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