Under the system as it currently stands, listed firms need only disclose stock option costing in footnotes to their financial statements. However, the new rules proposed by the FASB will oblige them to deduct those expenses from earnings, a move likely to drastically lower profits in some cases.

The move is intended to prevent abuses of the stock option system such as those which occurred at Enron and WorldCom. However, critics of the planned changes have suggested that they are likely to lead to the inclusion of flawed information in the financial statements of public companies, as methods of valuing stock options will necessitate the use of estimates of the firms' future performances.

Observers have suggested that there is a possibility that the implications of the FASB's proposals could be reduced by Congress, citing the bill passed by the House of Representatives last year, which limited the requirement to expense stock options to the top five executives in a firm. However, the legislation in question is currently stalled in the Senate.