IV
103D CONGRESS
1ST SESSION
H. CON. RES. 98
Expressing the sense of the Congress regarding the accounting standards
proposed by the Financial Accounting Standards Board.
IN THE HOUSE OF REPRESENTATIVES
MAY 11, 1993
Ms. ESHOO submitted the following concurrent resolution; which was referred
to the Committee on Energy and Commerce
CONCURRENT RESOLUTION
Expressing the sense of the Congress regarding the account-
ing standards proposed by the Financial Accounting
Standards Board.
Whereas the Financial Accounting Standards Board is recon-
sidering the proper accounting treatment for stock com-
pensation plans, including broad-based employee stock
option plans and employee stock purchase plans;
Whereas the Board has suggested that stock options granted
under stock compensation plans should be reported by
companies on their income statements as expenses, simi-
lar to cash compensation or health benefits;
Whereas improved financial reporting and disclosure of em-
ployee compensation is of paramount importance;
•HCON 98 IH
Whereas all 6 of the largest accounting firms have urged that
the current stock option accounting standards be left in
place;
Whereas the potential distortion that may result from imple-
menting the Board’s proposal may detract from recent
attempts to provide better and clearer information to the
public;
Whereas new businesses in new-growth sectors, such as high-
technology industries, often lack financial resources and
must rely on stock options to attract qualified employees;
Whereas the Board’s proposal will reduce incentives to grant
stock options, thereby limiting an important element in
the feasible compensation mix of these companies and
posing a threat to entrepreneurship in general;
Whereas employee ownership in American companies has
greatly expanded through the use of stock compensation
plans, and a majority of the emerging growth companies
distribute stock options to most or all of their employees;
Whereas a rule recently promulgated by the Securities and
Exchange Commission increases the disclosure obligations
of public companies, thereby improving financial report-
ing and disclosure of employee compensation, especially
for high-level executives;
Whereas stock compensation plans have the potential to stim-
ulate American productivity and enhance American com-
petitiveness;
Whereas discouraging the use of stock options will reduce the
ability of new businesses to obtain proper financing and
reduce America’s ability to compete in the world econ-
omy; and
•HCON 98 IH
Whereas one function of Congress is to discern how Federal
policies affect the general public and to ensure that the
general economic health of the country is not unduly
harmed by these policies: Now, therefore, be it
Resolved by the House of Representatives (the Senate
concurring), That it is the sense of the Congress that—
(1) the accounting standards proposed by the
Financial Accounting Standards Board will have
grave economic consequences, particularly for busi-
nesses in new-growth sectors, which rely heavily on
entrepreneurship; and
(2) the Board should not change the current ac-
counting rules under Accounting Principles Board
Decision 25 by requiring that businesses deduct
from profits the value of stock options.
Æ