Association for Financial Professionals Introduces Practical Guide On Choosing Stock Option Valuation Methods

Bethesda, Maryland - December 16, 2004 – Responding to market place demand for a resource to assist financial professionals in deciding which employee stock option valuation method best meets the needs of their company, the Association for Financial Professionals (AFP) will publish a practical guide to valuing employee stock options.

The standard, FASB 123R, issued today by The Financial Accounting Standards Board (FASB) requires companies to report employees stock option plans as an expense on their financial statements. The revised standard is effective for reports filed after June 15, 2005.

The soon to be released AFP Guide to Valuing Employee Stock Options, is authored by Daniel Abrams, a nationally-recognized expert in valuations and a consultant with NERA (NERA Economic Consulting, an international firm of economists). The guide is especially useful in providing both general management decision making information and a detailed analysis of the computations involved in determining valuations.

The AFP guide is intended to assist financial professionals who are leading their companies in transition to the new standard of mandatory expensing of employee stock options. AFP's Guide to Valuing Employee Stock Options, provides the following guidance:

• Explains and analyzes FAS 123 and the recent amendments that make expensing a requirement.
• Describes in detail the various models that a company should consider for valuing stock options to satisfy the new accounting requirements, including a discussion of the necessary inputs, data sources, and methods of implementation.
• Presents sample exercises for the various valuation models.
• Analyzes alternatives to standard stock options and the implications of changing a company’s equity-based compensation strategy in light of recent developments.

A copy of the guide will be available in February 2005 through the AFP website, www.AFPonline.org/options 

The Association for Financial Professionals, headquarters in Bethesda, Maryland, supports more than 14,000 individual members from a wide range of industries throughout all stages of their careers in various aspects of treasury and financial management. AFP is the preferred resource for financial professionals for continuing education, career development, certifications, research, representation to legislators and regulators, and the development of industry standards. Sponsored by the Association for Financial Professionals, The CTP designation is the globally recognized industry standard for treasury and a requirement for a changing profession. More than 16,000 professionals have earned AFP's certification since 1986. For more information about AFP, visit, www.AFPonline.org.