The good fight

FEARFUL and yet resolved, the world's main accounting standard-setters this week joined the most important battle in their history: the attempt to make companies treat share-based payments to their employees as an expense. Up to now, companies have had the choice to record stock options only in the footnotes to their financial statements. Under a new draft rule from the International Accounting Standards Board (IASB), a private group based in London, companies will have to deduct them from their profits. The effort may yet founder on opposition from business. If it does, investors may as well forget the idea that standard-setters have the ability to set accounting rules that try to reflect economic reality.