FASB plans to require companies to expense stock-options next year, but a new study shows it may be wise to act now.

Buck Consultants, part of Mellon Financial, predicts that technology companies will experience a median decrease in EPS of approximately 20 times greater than companies that voluntarily adopt stock-option expensing guidelines now.

The reason, according to Buck principal and study co-author Ted Buyniski, is related to retroactive accounting; once the FASB rule kicks in, companies will have to record expenses all the way back to the unvested options grant date, whereas companies that choose to expense now just have to accrue expenses based on current value (expensing past grants is not required).

"Taking a 'wait-and-see' approach seemed prudent a few months ago, but it is now regarded as a high-risk strategy," said Buyniski.

The complete analysis from Buck Consultants is available, below:

  Download "Options Expensing: By Choice or Mandate?"