“With so many companies agreeing to record their stock options as an expense, investors might think it soon will be a snap to compare, across companies, the cost of the popular employee benefit: They will just glance at the earnings statements,” writes Robin Sidel in today’s Wall Street Journal.

“Don’t bet on it.”

“Under a proposal being considered by the Financial Accounting Standards Board, companies would be able to choose one of three methods for expensing options. But because the three are vastly different, determining the cost of the options will still likely require some intense scrutiny of the dense footnotes that accompany an earnings report.”

“That is drawing the ire of some investors and accounting professionals who say the proposal goes against the goal of expensing options in the first place: creating a clear picture to determine how much effect they have on the bottom line. They want the board, which sets the nation’s accounting standards, to craft a uniform standard for the transition. That way, they say, investors can easily compare costs.”

” ‘If the investor still has to get out a pencil and a calculator, we haven’t accomplished anything,’ says James H. Hance Jr., chief financial officer of Bank of America Corp., which has said it will begin expensing options next year. The Charlotte, N.C., bank recently sent a letter to FASB, urging the selection of one method. So has the Investment Company Institute, a trade group representing mutual funds.”

” ‘The adoption of a standard approach by FASB would facilitate the ability of all investors to evaluate the effects of options upon earnings for all companies on a uniform basis,’ Matthew P. Fink, the group’s president, wrote in an Aug. 21 letter to FASB.”

“FASB concedes it is unusual to provide companies with several options for their accounting, but says the proposals are meant to encourage companies to treat them as an expense.”

” ‘We want to make it as palatable as possible. The board believes this is the best way to go,’ FASB spokeswoman Sheryl Thompson says.”

“The issue is growing in importance as more companies, feeling heat from investors about the cost of often-large options programs, change their accounting methods to treat options as an expense. So far, they still aren’t required to do so, but scores of companies in recent weeks have announced plans to make the change, many motivated by shareholder demands for more financial information following a spate of accounting scandals. For years, companies have been reluctant to expense options because they can take a bite out of earnings.”