This will cut down the Nasdaq balloon

SAN FRANCISCO (CBS.MW) - Beginning Jan. 1, the International Accounting Standards Board will require companies using international accounting standards to expense stock options.

The move, to be announced Thursday at the IASB's London headquarters, is certain to generate more pressure in the United States, where options expensing has been politically controversial
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http://cbs.marketwatch.com/news/story.asp?guid=%7B2B65281D%2DF2A5%2D44E6%2D9D69%2DB648FD536A84%7D&siteid=mktw

[MajorFlaw]

1. "'expensing options"

This is more likely to help markets than hurt them. For years, corporations have granted stock options to officers, directors and other people they wish to reward. For accounting purposes these options have been treated as coming at no cost to the corporation. This is ludicrous; often officers, directors and promoters of corporations make most of their $ by cashing in their grants of stock options and not by an appreciation in the value of the security itself. If corporations are forced to "expense" the cost of options, it will reduce the misleading "profit" portion of a corp.'s financial statements by exactly the amount given to insiders. This is a very good thing and would have an equally good effect if applied to our own GAAP (Generally Accepted Accounting Principles), the "bible" for our own accounting professionals.

3. Good in the long run. bad from earnings "number" standpoint

Bad because it makes actual reported earnings lower, and comparisons against the past look worse.

I agree it is a good move though.

[MercutioATC]

2. O.K., brokers? Will this help or hurt the value of my 401k international

stock fund? How about my small-cap fund?

[catzies]

4. Not a broker, but I'd look at the holdings within your fund,

and do research on whether this applies to those companies or not.