The Wall Street Journal reported that the Securities and Exchange Commission (SEC) is expected as early as this week to approve a plan to make the rule effective for fiscal years starting after June 15 rather than the current requirement of fiscal quarters starting after that date.
That move would give most US firms a six-month reprieve from the controversial expensing requirements issued by the Financial Accounting Standards Board (FASB). While the move wouldn’t change the picture for firms whose next fiscal year starts July 1, those whose next fiscal year kicks off January 1, 2006 would enjoy the additional time, according to the report.
The newspaper said that SEC staff members – including Donald Nicolaisen, the agency’s chief accountant, and Alan Beller, director of the SEC’s division of corporation finance – have pushed for the delay to give corporate officials more time to properly comply with the rules’ complex requirements. Even though FASB has already delayed the effective date by six months (See Pressure on FASB Produces Options Expensing Delay ), the Journal said the accounting regulator declined to do so again – prompting the reported SEC move.
While a delay would be welcome by many companies, it’s almost certain to draw criticism. Many investors have expressed concern that further delays will breathe new life into high-technology companies’ efforts to push Congress to block the new FASB rules.
More information about the option expensing issue is at http://www.fasb.org/project/equity-based_comp.shtml .