Stock-option accounting guidance.

• Position: SEC News

The SEC's Office of the Chief Accountant has issued a letter addressing the appropriateness of stock-option accounting practices that have led to recent company restatements due to errors in accounting for grants of stock options.

Specifically, the letter discusses the accounting consequences under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," for various circumstances, including:

* Dating an option award to predate the actual award date;

* Exercise price set by reference to a future...