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COPYRIGHT 2001 SourceMedia, Inc.
Beyond any doubt, the biggest controversy in the Financial Accounting Standards Board's history was its mid-1990s hassle over stock options.
The heat grew so intense that five board members bailed out to avoid a meltdown. They used these frank words to rationalize their compromise: "The board chose a disclosure-based solution for stock-based employee compensation to bring closure to the divisive debate on this issue -- not because it believes that solution is the best way to improve financial accounting and reporting."
What a bad choice! After all, the board was founded to create progress, not to see that everyone gets along.
Virtually all the hullabaloo involved the issue of whether an expense should be reported on the income statement. It almost sounds silly, doesn't it? Where else should any expense be reported?
"In the footnotes," said a lot of managers and their members of Congress. As a result of appeasement, FASB's bad choice opened the door to the deficient and dominant...
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