According to a SmartPros report, the Financial Accounting Standards Board (FASB) declined to do the test after its February 11 board meeting.
“FASB’s refusal to conduct field testing is a ‘brush-off’ to American small businesses and entrepreneurs. We urge Congress to take action to protect small businesses and to prevent FASB, an unresponsive, unaccountable body, from implementing an untested valuation method that could have disastrous consequences for America’s entrepreneurs,” said Small Business Survival Committee Chairman (SBSC) Karen Kerrigan.
Kerrigan charged that the field test was the only way FASB would get a true picture of the options playing field. “FASB somehow believes that talking to 18 companies about the costs of implementing an expensing standard is a satisfactory way to secure input on valuation and undertake a cost-benefit analysis,” said Kerrigan. “That approach is woefully inadequate and ignores the needs of small businesses around the country.”.
An exposure draft on options expensing is expected from FASB soon. On January 23, the SBSC joined a coalition of groups for a Washington press conference at which they urged FASB to pull back on a rule that would mandate options expensing (See Coalition Calls For Option Expensing ‘Field Test’ ).
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