|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
Tech Cos. Unveil Options-Expensing Plan
General Financial/ Business News . September 14, 2004
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EXCERPT: A group of technology companies Tuesday renewed pressure on accounting rule makers to drop a stock-options expensing rule, unveiling an alternative that they say is easier and less expensive to adopt. Cisco Systems Inc. joined Genentech Inc. and Qualcomm Inc. in developing the proposal. It would value stock options using a model that results in costs that are an estimated 70 percent lower than under the proposed accounting rule. The companies on Wednesday will outline their plan to the Financial Accounting Standards Board, marking the latest skirmish in an ongoing battle with the accounting standards-setter. If FASB rejects the plan, Cisco and its allies are betting that they will have new ammunition to persuade Congress to intervene. Companies "are trying to exhaust every non-legislative remedy," said Jeff Peck, who lobbies on behalf of the companies. "Members of Congress only act when they really feel like they have to act, and this is a way to make it clear that every effort has been made." FASB has tried for more than a decade to require companies to treat stock options as an expense, just as compensation and bonuses are. Its expensing rule will take effect at the end of the year unless it delays action, withdraws the proposal, or Congress steps in. Companies have threatened to stop issuing stock options if forced to deduct the cost of the options in their financial statements. That argument has in the past swayed many members of Congress, especially those in states such as Oregon and California whose districts are home to high-tech companies. |
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