The rules, approved by the board, would require companies based in countries that adhere to them to make the switch beginning in 2004, said the report.

The move comes as some US companies, including Coca-Cola Co., begin to shift on their own to the expensing of stock options, which reduces corporate earnings and would make stocks look more expensive, said the report.

The report also quoted an investment bank of European insurer Allianz AG as saying that earnings for the S&P 500 would have been 30 percent lower last year if all stock options had been expensed.

The rule on share options is the most high-profile issue facing the board as it tries to write universal accounting rules that even US regulators might accept as the equal of US accounting standards.

Share options are a major concern in the US as more revelations of accounting frauds have shown share options could cause problems.