At a meeting on Wednesday, members of the Financial Accounting Standards Board focused on FAS 123, Accounting for Stock Based Compensation. While no long-term solution was arrived at, the standards board is apparently weighing three alternatives for phasing in option costs on corporate income statements, according to Dow Jones Business News.

The Washington Post reported that a majority of the seven-member board agreed that companies should be allowed to choose between the three methods.

The first, which is the current rule, would allow the expensing only of grants awarded in the year the switch is made. Second, companies could count both new grants and outstanding, unvested options in the first year options are treated as expenses. Finally, companies could retroactively restate their annual results going back to 1995 to reflect the cost of options in each of those years.

FASB board member Edward W. Trott told The Post that companies that have volunteered to make the switch should not be penalized with more onerous accounting requirements.

“My objective is to have a transition that encourages the switch,” he said to The Post. “It would seem to be unfair to take away what is currently written in the document that people have made decisions on.”

FASB’s directive to the staff to do more research suggests that the board is determined to be cautious, despite all pressure its facing to take action, any action, in the wake of the accounting scandals that have dominated the headlines for months. Indeed, FASB is unlikely to revise the rule before next year at the earliest.

FASB chairman Bob Herz told Bloomberg News late Tuesday that the standards setting body’s deliberative process will require it to consider comments from accountants, investors, and business executives for another six months at least. Herz doesn’t expect the board to finalize its new options ruling until the spring or summer of 2003.

Of course, by then, the new approach may not even be necessary. As CFO.com reported, General Motors on Tuesday joined the growing list of companies that have announced they will voluntarily begin to expense options. That roster includes several marquee corporates, including Coca-Cola, AOL Time Warner, Bank One, and Citigroup.

While FASB appears to be taking its sweet time figuring out how to figure out options, the SEC is racing along to shorten the window for insider trading disclosure. In a notice posted on the agency’s Web site late Tuesday, the Commission asked for comments about its proposal to give corporate officers and directors only two days to disclose their trades in company stock.

The current rule only requires executives and board members to submit a form with the agency by the tenth day of the month following such a trade. That timetable can translate into a delay of as much as 40 days before investors find out about inside trades by a company’s officers or directors.

The tighter deadline is one of the features of the Sarbanes-Oxley Corporate Accountability Act signed into law in July by President Bush.

But like the proposed time limit on reporting inside trading, CFOs will have to move quickly if they want to meet the SEC’s deadline for comments. Responses must be proffered by Aug. 15 — one day after the deadline for submitting sworn financial statements with the Commission.