April 13 (Bloomberg) -- U.S. companies may get a six-month reprieve from the Securities and Exchange Commission for treating options as expenses, a new accounting procedure that will reduce earnings, people familiar with the matter said.

Commissioners at the SEC are voting on a staff proposal to delay implementation of the rule, which treats employee stock options as an expense, until the start of a company's first fiscal year after June 15. Under the Financial Accounting Standards Board's current rule, it would have started with the first fiscal quarter after that date.

``That makes a great deal of sense, rather than forcing them to expense stock options before the beginning of their fiscal years,'' former SEC Chairman Arthur Levitt said in an interview. The commissioners' vote, held without a public meeting, may occur as early as today, he said.

The rule will force companies, including Intel Corp., Genentech Inc. and Yahoo! Inc., to more clearly state the cost of awarding employee stock options, which until now has mostly been relegated to footnotes in financial statements. Such accounting would have reduced per-share profit among companies in the Standard & Poor's 500 Index by 8 percent in 2003, according to a study by Bear Stearns Cos.

The delay wouldn't affect about 300 companies such as Sun Microsystems Inc., the world's No. 3 maker of computers to run corporate networks, that start fiscal years July 1.

Done Deal

FASB passed the options-expense rule last December after two years of debate that pitted proponents such as Federal Reserve Chairman Alan Greenspan against Intel Chief Executive Officer Craig Barrett.

Intel, the world's biggest computer-chipmaker, Genentech, the world's second-biggest biotechnology company, and other companies that use stock options to attract employees argued the rule gives trial lawyers ammunition for class-action lawsuits and will cost them money.

Levitt said he doubts the companies lobbying against the stock-options expensing will convince Congress to vote against the rule.

``In my judgment that train has left the station,'' he said. ``Congress will fulminate, but I don't believe they will overturn FASB.''

Jeff Peck, lead consultant for the International Employee Stock Options Coalition, a group that lobbied against the rule, declined to comment. Peck's group had called for the extension of the deadline.

FASB Chairman Bob Herz is in Washington for a hearing before a House Financial Services subcommittee and wasn't available for comment.

To contact the reporter on this story: Judy Mathewson in Washington at jmathewson@bloomberg.net

Last Updated: April 13, 2005 14:08 EDT