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Taking Stock

Minimize the costs of new stock-option expensing rules.

This story appears in the June 2005 issue of Entrepreneur. Subscribe »

As companies gear up for the hotly contested rule requiring U.S.firms to expense stock options, there are several ways they cansoften the blow to their balance sheets.

Last December, the Financial Accounting Standards Board adopteda rule forcing companies to account for the value of employee stockoptions from corporate income; it takes effect in June for publiccompanies and in December for private firms. The rule--aimed atshedding light on how employee stock options affect earnings--metespecially fierce opposition from the technology sector, whichardently uses stock options to recruit top talent.

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