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Accounting Bulletin Issued on Stock Options

The Office of the Chief Accountant and the Division of Corporation Finance announced the release of a staff accounting bulletin relating to the Financial Accounting Standards Board's accounting standard for stock options and other share-based payments. The interpretations in Staff Accounting Bulletin No. 107 express views of the SEC staff regarding the application of Statement of Financial Accounting Standards Statement No. 123R.

Statement 123R was issued by FASB in December 2004. Among other things, SAB 107 provides interpretive guidance related to the interaction between Statement 123R and certain SEC rules and regulations, as well as provides the staff's views regarding the valuation of share-based payment arrangements for public companies. SAB 107 also reminds public companies of the importance of including disclosures within filings made with the SEC relating to the accounting for share-based payment transactions, particularly during the transition to Statement 123R. The SEC staff stated that the interpretive guidance in SAB 107 will assist both public entities in applying the provisions of Statement 123R and investors and other users of financial statements in analyzing the information provided under that statement.