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President Bush has announced he opposes requiring the reporting of options as expenses, but Alan Greenspan, the Federal Reserve chairman, has said they should be expenses.
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Robert Herz, the new chairman, has made clear that he thinks options should be expensed but that he is not sure about how to best measure the expense.
It also took sides in a lively economic dispute.Among economists, the debate is largely about how to value options and when to expense them, not about whether they should be expensed at all.
Whatever uncertainties there are in fair-value option pricing, goes the argument, they are smaller than the uncertainty in the value of other items already routinely expensed, such as depreciation and pension-fund gains or losses.Ask not whether, but whenThe biggest philosophical dispute among economists concerns when options should be expensed.
Books have been written on whether they should be expensed.
SIEGEL: I've always maintained options should be expensed.
But the FASB ruled that they should be expensed immediately, because their future value is too subjective to judge reliably.
The issue, whether stock option grants should be expensed on corporate income statements, was in vogue all summer following a mid-July announcement from Coca-Cola that the beverage giant would expense grants beginning in the fourth quarter of 2002.
CEO David Barrett says that as it turns out, most people don't really want another credit card — they just want to keep using their regular credit card and have Expensify figure out which charges should be expensed.
However, capital investment should be expensed in accordance with IRS schedules.
At the end of each accounting period, the portion of the prepaid asset that has been rendered should be expensed.
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