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SEC Accountant Clarifies Options Rules

Law360 (September 20, 2006, 12:00 AM EDT) -- Navigating the murky waters surrounding stock options grants may soon get a little easier for auditors. The U.S. Securities and Exchange Commission’s chief accountant has issued a letter clarifying the accounting principle that’s caused alarm in many options probes.

SEC Chief Accountant Conrad Hewitt drafted the letter addressing Accounting Principles Board Option No. 25, entitled “Accounting for Stock Issued to Employees.” Option 25 relies on the determination of measurement date, or the date on which a company issued the options.

“It is important to determine whether...
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