Convergence Towards International Financial Reporting Standards Will Require Comprehensive Review of Executive and Equity Compensation Programs

Over the past few years, there has been much attention paid to the accounting treatment for equity based compensation, culminating in SFAS 123R and subsequent interpretations and clarifications.

This change led many companies to reconsider and, in many cases, revise their equity compensation strategies, but the impact of SFAS 123R may pale in comparison to another wave of change that is coming. The convergence of US accounting rules with international standards will result in pervasive changes in the measurement and reporting of corporate financial performance.