FASB decided at today’s meeting to reconsider a FAS 123(R) provision (paragraph 32) that requires accounting for stock options as liabilities if the company can be required to cash out the options under any circumstances – even unlikely circumstances. Liability treatment for affected options would require companies, upon adoption of FAS 123(R), to incur ongoing variable fair-value accounting charges, and some companies could incur one-time transition charges. (See GRIST #20050311, 12/29/05 and GRIST #20060007, 1/6/06)
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