NEW YORK (CNN/Money) - The board that sets U.S. financial accounting standards took a step Wednesday toward recommending companies treat stock options as an operating expense.

The Financial Accounting Standards Board voted to consider that the cost of stock options be subtracted from corporate results under Generally Accepted Accounting Principals, or GAAP.

The issue has split finance professionals trying to lift confidence in corporate accounting following scandals at Enron, WorldCom and elsewhere.

Proponents says the cost of awarding stock to employees at below-market prices should be taken out of income statements, just as employee salaries are. But critics contend that subtracting the costs will mislead investors by clouding true earnings

Months of study and debate are expected to follow. The issue approved at Wednesday's meeting was simply about placing the item on the board's agenda.

Under current U.S. accounting rules, companies have the option of treating stock options as an expense or simply disclosing them in the footnotes of their annual report.

Few companies choose to expense stock options because that would crimp earnings, but a small number have switched to expensing options after a spate of accounting scandals last year left investors clamoring for more conservative accounting.

Coca-Cola Co., Washington Post Co. and Ford Motor Co. are among about 170 companies that have volunteered to expense options in a practice supporters say will lift the confidence of investors smarting from recent disclosures of accounting fraud.

The practice would cut profits, particularly at technology companies that dangled the seemingly attractive perks during the 1990s.

But a big chunk of options issued since 1999 are "underwater" because three years of market declines have pushed stock prices below the options' exercise price.

Profits at S&P 500 companies would have dropped 20 percent in 2001 if they had expensed options, according to a Bear Stearns study.

FASB sets widely followed accounting standards but has no enforcement power. The last time FASB took up the issue of stock options in the mid 1990s, Silicon Valley's political muscle successfully beat back the board's proposal. Already, FASB is facing intense lobbying from the technology industry and key lawmakers, who argue that stock options can't be valued accurately.

Earlier this week, the Senate's only accountant, Republican Mike Enzi of Wyoming, and 14 other senators, including Democrats Edward Kennedy of Massachusetts and Joseph Lieberman of Connecticut, wrote to FASB opposing the mandatory expensing of stock options, which, they argued, would inflict a "fatal blow" on broad-based option plans.

But Warren Buffett, the CEO of Berkshire Hathaway, Alan Greenspan, the Federal Reserve chairman, and Arthur Levitt, who ran the Securities and Exchange Commission under President Bill Clinton, have all said stock options should be treated as a corporate operating expense.  

-- from staff and wire reports