... Congress will pass legislation mandating required procedures for brain surgery.
OK, so it's not that bad, but it's not good. Congress is considering overruling the Financial Accounting Standards Board's rules on expensing employee stock options. (Link requires registration.)
WASHINGTON -- The ink is barely dry on new rules governing the treatment of employee stock options and already opponents are preparing to lobby the new Congress with an eye towards derailing them.
Since the Financial Accounting Standards Board (FASB) is moving ahead with its proposal, "we will continue to aggressively lobby the U.S. House and Senate to seek an appropriate legislative solution in the 109th Congress," said John Palafoutas, senior vice president of domestic policy for the AeA, a Washington-based technology trade association. He called the proposal "fundamentally flawed."
And why is Congress considering doing this? Because they have constituents throwing temper tantrums:
After two years of bitter fighting, the standards board published a 27-page rule on Dec. 16 to force companies to deduct the cost of employee stock options from profits. Many in the high-tech sector say it would seriously curtail their operations and cut their reported profits because of their heavy use of stock options as a compensation tool.
The board "is continuing to disregard the legitimate concerns of the high-tech industry," Palafoutas said.
[rant] OK, I'm not entirely sure I agree with the requirement that companies expense employee stock options, but I get so sick of people protesting accounting rules because it would make their income statements look worse. It's a stupid argument because that's often the whole point of the accounting rule. It is, as they say, a feature, not a bug. I don't mean that the FASB is targetting certain sectors or companies specifically, but when they pass a rule like this it means that they've decided the way people had been doing things doesn't properly reflect the true cost of their operations. In other words, it's designed to make their income look smaller; that's the whole point!
Second, issues like this are extremely complicated and require a detailed understanding of the established framework of financial accounting rules. In other words, if you haven't studied accounting theory, chances are you don't even understand what the issue is. Since most members of Congress haven't studied accounting at all, the chances that they would draft a rule that properly reflected income, to say nothing of even making sense, are remote. For Congress to get involved in something like this is just idiotic.
Not that that's likely to stop them.
Which brings me to my next gripe. Why is it that people seem to think that getting elected to Congress makes someone an instant expert on everything? Their just human beings folks. Getting elected doesn't get them an invisble hat that magically gives them immense wisdom and understanding of every issue. Most of them have no business meddling in, well, ..., anything.[/rant]
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