SEC's Donaldson damns anti-FASB bill.
SEC Chairman William Donaldson lent his weight to the pro-FASB
forces in the Senate. In doing so, he strengthens the position of Sen.
Richard Shelby (R.-Ala.), chairman of the Senate Banking Committee, who
is refusing to bring up the Stock Option Accounting Reform Act of 2003
(S. 1890) for a vote. That's the bill that passed the House on July
20 by a vote of 312 to 111. Seen as an anti-FASB bill, the legislation
stops way short of where the FASB has said it intends to go on mandating
stock option expensing. For example, S. 1890 requires expensing for only
the top five executives of a company, but only after economic impact
studies are done by the Departments of Commerce and Labor. Shelby wants
to protect the FASB's independence from congressional
micro-managing. So the anti-FASB forces must look for an unrelated bill
that is about to pass the Senate to which they could attach S. 1890 as
an amendment. Donaldson's letter in August to a number of senators,
including Senate Majority Leader Bill Frist (R.-Tenn.), makes such an
"end run" much less likely, given Donaldson's stature.
Donaldson said that S. 1890 "would remove certain decision-making
responsibility from the FASB and thereby disrupt the independent,
private-sector accounting standard setting process." The American
Electronics Association (AEA) is one of the chief proponents of S. 1890.
It organized a "fly in" of members to the Senate on September