Financial Reporting


The International Accounting Standards Board (IASB) in February issued International Financial Reporting Standard (IFRS) 2, Share-based Payment, on accounting for such transactions, including grants of share options to employees ( www.iasb.org/news/press.asp ). Until the issuance of IFRS 2, international accounting standards did not address the recognition or measurement of options-based compensation expenses.

At press time, a spokesperson for the Financial Accounting Standards Board (FASB) said it would issue an exposure draft on this subject in late March and release final stock-based compensation guidance by the end of the year. She said FASB’s position is very similar on all key points to that of the IASB in requiring companies to use a fair-value approach to recognize the cost of employee stock options at grant date as an expense on their income statements.

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