The American Electronics Association, based in Santa Clara is up in arms over a proposal by the Financial Accounting Standards Board that would force companies to value stock options on their financial statements, and have launched an association-wide effort to get it overturned. The Association’s president, Richard Iverson, said that the proposal, as currently structured, would drive a stake into the heart of America’s high technology industry. In the name of accounting consistency, the proposal will cripple the engine of technology growth in the United States. The proposal at issue would force companies to charge against profits the value of stock options as they are granted to employees. This would weaken earnings statements and out of necessity cause companies to abandon the use of stock options. The proposal would have its greatest impact on companies that are growing rapidly and that grant options to a large number of employees – exactly the profile of many technology companies, the Association comments. The American Electronics Association represents some 3,000 technology companies in the US.
