The Committee on Corporate Reporting.

• Position: Committee of Financial Executives Institute

As the FEI committee dedicated to accounting, reporting and other controllership issues, the U.S. Committee on Corporate Reporting always keeps its ear to the ground for any and all developments affecting financial executives and their companies. The committee closely communicates with all the major standard-setting bodies through its standing subcommittees, which serve as CCR and FEI liaisons to the Securities and Exchange Commission, the Financial Accounting Standards Board, the American Institute of Certified Public Accountants and the Association for Investment Management Research.

Those close links form the foundation for the activities of CCR's ad-hoc project subcommittees, which focus on addressing specific reporting issues as they surface. Last year, says Earnie Edwards, vice president and controller of Aluminum Company of America and chairman of CCR, "Stock compensation was definitely at the top of the list." As many FEI members know, when the FASB proposed expensing executive stock options, CCR strenuously objected, contending that the value of options isn't measurable with enough accuracy to record in financial statements. "When we met with FASB representatives several months ago, we proposed that if the FASB insists on measuring stock compensation, it makes more sense to use a range instead of one number for stock options," Edwards says.

Faced with overwhelming opposition from the business community, the FASB decided to allow companies to disclose executive stock compensation in a footnote to their financial statements rather than requiring companies to expense the options. But companies that choose not to expense options must still disclose what the impact on net income would be if the options were expensed.

So while the initial battle on stock compensation may be over, CCR is still waiting to see if it's won the war. "We want to see what the FASB comes up with this spring before we do anything else," Edwards explains. The FASB hasn't yet stated whether it will issue a final standard or revise its exposure draft, he says, nor how it would require stock-option values to be calculated. Valuation has been the crux of much of the stock-option controversy. Meanwhile, Brad Goodwin, vice president and controller of Genentech and chairman of CCR's stock-compensation subcommittee, sent another letter to the FASB in December recommending specific disclosures to be included in the note to financial statements and reiterating the...