In testimony before the House Subcommittee on Commerce, Trade and Consumer Protection, Herz said that such considerations will also include whether FASB should mandate the so-called fair value approach for all stock-based compensation.

The independent private-sector organization, which sets the standards for financial accounting and reporting, issued a new standard in December that allows "enterprises that are voluntarily changing to the preferable fair value approach to effect the change as currently required, on a prospective basis only for new stock options granted, and only if the enterprises make the switch before the end of 2003, or to make the change for all unvested stock options outstanding, or to restate all periods presented."

If FASB's seven-member board votes to mandate a fair value approach for all stock-based compensation, the body would be following in the tracks of its international counterpart, the International Accounting Standards Board (IASB), which has proposed that this is the appropriate accounting method for stock options granted to employees.

Under the IASB's fair value approach, the proper accounting for stock options is to measure compensation for the "fair value" of the options at the date granted and to recognize the cost over the period vested in the options.

The FASB's authority with respect to public companies comes from the Securities and Exchange Commission, but the body has no power to enforce its standards.