Another Look at FASB Interpretation 44

BY FRANK C. MINTER

A comment in “FASB Offers More Guidance on Stock Options” ( JofA, July00, page 18) suggests that the inability to reprice options could cause a company to lose all its employees if the value of its stock declines and is not likely to go up in the near future.

I have been involved with financial reporting issues on behalf of the Institute of Management Accountants for over 15 years and we, like most everyone else, were opposed to the FASB conclusions on recognition and measurement of stock compensation. However, as the board worked to clear up the many interpretive questions resulting from the continued use of APB Opinion no. 25, we participated in that due process as well.

I have never objected to the concept that repricing of options makes a fixed plan become a variable plan. That simply makes sense. Rather than reprice, all any company has to do is simply issue new options and leave the “underwater” ones on the table. I realize sometimes that requires the action of stockholders to approve additional shares, but if the action is appropriate, there should be no problem with stockholders.

Frank C. Minter, CPA
Birmingham

SPONSORED REPORT

Keeping client information safe in an age of scams and security threats

A look at the Dirty Dozen tax scams and ways to protect taxpayer information.

TECHNOLOGY Q&A

How to create maps in Excel 2016

Microsoft Excel 2016 has two new mapping capabilities. J. Carlton Collins, CPA, demonstrates how to make masterful 2D and 3D maps in Excel 2016.

QUIZ

News quiz: IRS enforcement, a hot job, and audit value

The IRS’s 2016 Data Book, a “hot job” of particular interest at this time of year, and insight into how executive and audit committees view the insights from financial statement audits received attention recently. See how much you know with this short quiz.