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Expensing Stock Options

 

CFA Institute believes that financial statements should be reported from the perspective of the shareholder who bears the ultimate risk, and with the shareholder’s best interests held paramount. Financial statements should be fully transparent and report the fair values of all assets, liabilities, exchanges, and transactions that could potentially impact the investor’s equity position. There should be no off-balance sheet reporting or “hidden” debt, assets or obligations. Stock options are compensation and therefore must be expensed in a company’s financial statements.

 

  • Letter from president and CEO Jeff Diermeier, CFA, to SEC Chairman William Donaldson, CFA, on strictly adhering to FASB-sponsored rules on stock option accounting, March 2005
  • San Jose Mercury News Letter to the Editor (Submitted) in response to "Needed: Formula for Options Values," December 2004
  • Washington Times Letter to the Editor; "Investors' Interests First," September 2004
  • Washington Post Op-Ed (Submitted); "Stock Option 'Reform' Will Weaken Investor Protections," September 200
  • Article: “Stock Options and the Lying Liars Who Don't Want to Expense Them,” Financial Analysts Journal, July/August 2004
  • Article: "The Great Stock Option Debate:  Where We Are Now and How We Got Here," June/July 2004 (from The Financial Journalist)
  • Article: "Model Measurements: Black-Scholes, Binomial or ?" June/July 2004 (from The Financial Journalist)
  • Article: "Employee Stock Options Roundtable: A Candidate Debate Among The Experts," June/July 2004 (from The Financial Journalist)
  • Article: "FASB's Current and Proposed Rule: A Comparison," June/July 2004 (from The Financial Journalist)
  • Article: "FASB's Proposal and IASB's New Rule: A Comparison," June/July 2004 (from The Financial Journalist)
  • Comment letter to Congress on the Stock Option Accounting Reform Act, May 2004.
  • Advertorial (PDF): “Investors Want Earnings to Reflect Reality:  Expensing Stock Options Shouldn't Be Optional," April 2004
  • Press release: “CFA Institute Supports Financial Accounting Standards Board’s New Proposal to Require U.S. Companies to Expense Stock Options,” April 2004
  • Comment letter to the Canadian Standing Senate Committee on Banking, Trade and Commerce on expensing stock options at fair value, June 200
  • Comment letter to FASB, February 2003
  • Press release: “CFA Institute Commends IASB for Issuing Draft Rule on Expensing Stock Options,” November 2002
  • Press release: “CFA Institute Wants FASB to Follow IASB Plan to Require Companies to Expense Stock Option Costs,” July 2002
  • Press release: “CFA Institute Lauds Moves by Coca-Cola and Washington Post to Recognize Stock Options as Expense,” July 2002
  • Press release, “Analysts, Portfolio Managers Want Employee Stock Options Expensed on Income Statement, Global CFA Institute Survey Shows,” November 2001