For Subscribers

There's No Hiding It

All the cool companies are expensing their options. Can your business survive without that extra earnings padding?

By C.J. Prince

Opinions expressed by Entrepreneur contributors are their own.

When The Coca-Cola Company first volunteered to treat options asan expense in its financials as a service to shareholders, theresponse from the business community was lukewarm, even skeptical.Other corporate behemoths, unexcited by the idea of levelingearnings with a big compensation charge, were not prepared to jumpon the bandwagon. But in recent months, the trickle of companiesfollowing in Coke's footsteps has become more of a stampede, asbusinesses race to prove to investors that they, too, are dedicatedto giving investors the whole truth. Now, with the practice not yetlaw, but quickly becoming the fashion of the day, smallpublic-company CEOs have to figure out whether to follow suit.

The debate has come a long way since 1994, when similarproposals by the Financial Accounting Standards Board (FASB) werequickly quashed. But while the FASB has recently stated it will notrevisit the idea of requiring companies to expense options (untilthe International Accounting Standards Board does so), it diddecide to propose requiring that companies disclose the value ofoptions in the footnotes of quarterly financial statements, ratherthan in their annual reports.

Continue reading this article — and all of our other premium content with Entrepreneur+

For just $5, you can get unlimited access to all Entrepreneur’s premium content. You’ll find:

  • Digestible insight on how to be a better entrepreneur and leader
  • Lessons for starting and growing a business from our expert network of CEOs and founders
  • Meaningful content to help you make sharper decisions
  • Business and life hacks to help you stay ahead of the curve

Related Topics

Editor's Pick

Everyone Wants to Get Close to Their Favorite Artist. Here's the Technology Making It a Reality — But Better.
The Highest-Paid, Highest-Profile People in Every Field Know This Communication Strategy
After Early Rejection From Publishers, This Author Self-Published Her Book and Sold More Than 500,000 Copies. Here's How She Did It.
Having Trouble Speaking Up in Meetings? Try This Strategy.
He Names Brands for Amazon, Meta and Forever 21, and Says This Is the Big Blank Space in the Naming Game

How to Detect a Liar in Seconds Using Nonverbal Communication

There are many ways to understand if someone is not honest with you. The following signs do not even require words and are all nonverbal queues.

Business News

Would You Buy Maggie Murdaugh's Monogrammed Snake Print Pillows? Items From the Murdaugh Family Home Are Going Up for Auction

The sale comes just weeks after Alex Murdaugh was sentenced to two consecutive life terms for the June 2021 murders of his wife, Maggie Murdaugh, and son Paul Murdaugh.


Learn Up to 24 Languages with This Price Drop on Rosetta Stone

Get unlimited access to Rosetta Stone for only a fraction of the cost.


How to Get High Quality Leads From LinkedIn At No Cost

Struggling to figure out how to get top-quality leads through LinkedIn? Keep reading to learn the best LinkedIn lead generation practices that work and the common mistakes you must avoid.

Business News

Shohei Ohtani Is the First MLB Player to Hit 4 Million Followers on Instagram

The Angels' sensation reportedly gained around 2 million followers during the 2023 World Baseball Classic.