FASB rules: stock options must be expensed.

• Position: Breaking News

The value of stock options must officially be deducted from company profits, according to the final ruling from the FASB issued on Dec. 16, 2004.

The new rule, FASB Statement No. 123 (revised 2004), Share-Based Payment, is effective for the first interim or annual reporting period after June 15, 2005.

The controversy over stock options had become a heated debate between tech companies and leaders in the investment community. Tech companies opposed the proposal; however, leading officials, including Federal Reserve Chairman Alan Greenspan, SEC Chair William Donaldson and the Big Four accounting firms, supported FASB's stock options plan, according to AP reports.

Public entities that file as small business issuers...