• FASB Issues Proposal on Stock Option and ESPP Expensing
  • May 31, 2004 | Authors: Marian A. Tse; Scott A. Webster
  • Law Firm: Goodwin Procter LLP - Boston Office
  • It appears that stock option expensing is on its way. Not only will this affect stock option and other equity award practices, but most employee stock purchase plans, or ESPPs, that contain a discount or a so-called look-back feature (e.g., a purchase price equal to 85% of the lower of the starting or ending stock price) will also be affected. It is important that companies that grant stock options or other equity awards, and companies that have ESPPs, consider the implications of the new accounting rules before they become effective.