At its forthcoming meeting in September, the Accounting Standards Oversight Council, the independent group that provides public oversight of accounting standard-setting in Canada, will discuss the accounting treatment of stock options. The issue is whether the Accounting Standards Board should immediately consider requiring Canadian companies to expense the cost of stock options in their financial statements.
The AcSOC sub-committee examining accounting issues as a result of the Enron failure in the United States, met last week to discuss the priorities and programs of the AcSB in light of Enron and similar problems. The sub-committee decided to ask for written submissions to be made to the full council meeting on September 26-27 as to whether Canada would be competitively disadvantaged should the AcSB decide to mandate recognition of stock-based compensation expenses, ahead of the U.S.
“The International Accounting Standards Board has approved in principle an exposure draft on accounting for stock payments that will require the recognition of all such expenses,” said Thomas Allen, AcSOC chairman. “The issue of competitive impact, which might result from forcing Canadian corporations to take an income statement ‘hit’ ahead of their competitors in the U.S., merits a full dialogue at the upcoming September meeting.”
Parties interested in making their views known on stock-based compensation are asked to send written submissions to the AcSOC Secretary, Harry Klompas, by email to harry.klompas@cica.ca, tel. 416-204-3236. The meeting will be open to the public.