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IWS Documented News Service
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Institute for Workplace Studies                 Professor Samuel B. Bacharach
School of Industrial & Labor Relations          Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor                  Stuart Basefsky
New York, NY 10016                      Director, IWS News Bureau
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UK
London, 29 November 2004

Companies support new accounting for share options standard
http://www.mercerhr.com/pressrelease/details.jhtml/dynamic/idContent/1163680;jsessionid=NCTZINLWBYY5WCTGOUGCHPQKMZ0QYI2C

Almost two-thirds of companies support a new international accounting standard requiring them to expense employee share options in their financial statements, according to a survey by Mercer Human Resource Consulting. The standard, IFRS 2, requires European-listed companies to make a charge in their income statements to reflect the fair valueof share awards granted to employees. The charge will make some organisations look significantly less profitable.

The survey, involving 70 respondents, found that 64% were in favour of the standard and its application, while over a quarter (27%) agreed with expensing share-based payments in principle but not with the IFRS 2 approach. Only 9% of respondents were against expensing for stock options in all cases. The standard comes into effect for accounting periods beginning on or after 1 January 2005.

Phil Turner, European Partner, said: "Accounting for share awards and options has been highly controversial, so it is surprising to see such widespread support from companies. There now seems to be a sense of acceptance, and an appreciation that the standard will help to improve comparability of company accounts in Europe." He said: "IFRS 2 represents a major change to previous accounting rules and companies will need to consider the wider impact on their share-based incentive schemes."

For more information on the new international financial reporting standards, visit www.mercerHR.com/ifrs
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Stuart Basefsky                 *
Director, IWS News Bureau               *
Institute for Workplace Studies *
Cornell/ILR School                      *
16 E. 34th Street, 4th Floor            *
New York, NY 10016                      *
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Telephone: (607) 255-2703               *
Fax: (607) 255-9641                     *
E-mail: smb6@cornell.edu                *
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