Expensing options could be expensive. While fund industry leaders are calling for uniform expensing of options, some fear such action could drag corporate earnings down by 23% or more. And with the markets as ugly as they have been, now is not a good time to risk further losses, opponents to regulation say.
The Investment Company Institute (ICI) recently called upon the Financial Accounting Standards Board to adopt a standard for expensing options. Commonly reported items, such as earnings per share, will take on greater meaning under a uniform system, the ICI claims. The institute further reasons that options should be treated the same as other forms of compensation.