(Following is an updated version of an article that first ran on June 19, 2002.)

NEW YORK (CNN/Money) -- U.S. businesses have so far resisted mounting pressure to account for the stock options they give to top executives as an expense. How much longer can they hold out?

Under current accounting standards, companies are not required to list stock options as expenses. That makes short-term profits look better, thereby boosting stock prices and making those options even more valuable. Meanwhile, without digging into the footnotes in a company's financial statement, investors have no way of knowing the impact the options could have on their shares.

In the wake of the collapse of Enron Corp. -- whose executives cashed in options for millions, while employees and other investors were left with nothing -- the issue of option accounting has become a hot topic when corporate executives, regulators and Wall Street analysts discuss ways to restore investor confidence in corporate accounting.

Opponents of expensing also say it would make corporate accounting more of a head-scratcher than it already is. First, companies would have to come up with a way to estimate the current dollar value of stock options, which are only paper until they are exercised. Then, when the options are exercised, they'd have to go back and adjust expense reports to reflect the real cost.

"It's not clear we should muddy up the income statement by using [some] process to ascribe an expense charge as you grant options," Treasury Secretary Paul H. O'Neill said at this week's Money Summit in New York. "Options have nothing to do with income, they have to do with the balance sheet."

O'Neill, President Bush and many corporate leaders would prefer a milder standard, that shareholders approve options before they are granted. O'Neill said he would also be willing to have companies issue a statement about the possible ramifications of options -- something they already do, although it's buried in the footnotes of most financial statements.

In early June, the New York Stock Exchange's Corporate Accountability and Listing Standards Committee addressed the issue only by asking for shareholder approval of options.

And the California Public Employees' Retirement System (CalPERS), the biggest U.S. public pension fund, took a pass this week on setting a tougher standard after consulting with former Securities and Exchange Commission Chairmen Arthur Levitt and Steve Wallman and several business leaders.

While Levitt and others supported the idea, Wallman and others opposed it; and CalPERS, finding no consensus, decided to spend the time until its next board of directors' meeting studying different ways to make companies toe a stricter line when it comes to disclosure.

"We want to look at best practices, alternatives in lieu of expensing," said CalPERS spokesman Brad Pacheco. "We want to come up with penalties to put on companies if they abuse options."

CalPERS also plans to survey investors about the value they place on options and whether or not expensing the options would confuse them, as O'Neill suggested.

But a growing chorus of voices opposes O'Neill's stance, and companies seem at ever greater risk of being required to expense options. For example, Goldman Sachs CEO Henry Paulson said earlier this month that he saw both sides of the issue, but said, if forced to make a prediction, he thought companies would eventually have to claim options as expenses.

"O'Neill is in the minority," consumer advocate Ralph Nader, another participant at the Money Summit, said. "They take it as a deduction. If it isn't compensation, then what is it?"

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Nader said many companies, especially technology firms, resist expensing stock options because it would put a serious dent in their earnings, singling out Cisco Systems Inc. (CSCO: Research, Estimates) as one example.

Cisco's estimate of the bite it took from stock options in its latest quarter was $37 million, less than 1 percent of its quarterly revenue of $3.9 billion.

Cisco spokesman John Earnhardt said his company objected to expensing options for many of the same reasons O'Neill listed, adding that expensing options would also discourage companies from giving them out, cutting their impact as an employee motivator.

"Senior executives will still get options because that's how you recruit top talent," Earnhardt said. "It's me or the secretary or the line worker who won't get them."

Fans of expensing say opponents are obscuring the real issue, that options are payment and, thus, should be reported as payment. While it's impossible to know the true reason companies issue stock options -- they usually say the options are intended to give employees an incentive to make the company more valuable -- it is often used in lieu of cash payments to employees, boosting cash flow and profit.

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"If you think companies issue options rather than paying cash, as a substitute for wages, then they should be shown as an expense," said Joshua Livnat, an accounting professor at New York University, who believes the Financial Accounting Standards Board will eventually require options to be expensed.

In response to the argument made by O'Neill and others that it would be too difficult to use subjective models to put a price tag on options, Livnat pointed out that companies already use subjective models to come up with other expenses, such as depreciation of equipment.

And Bill Miller, manager of the Legg Mason Value Trust Fund and another Money Summit participant, said it was hypocritical for companies to say it's too difficult to value options when they have no problem valuing pension income -- a boost to earnings -- by estimating market returns into the future.

"It's no secret that the most vigorous proponents of stock options and the most vigorous opponents of expensing them are the people getting them," Miller said.

Miller also said companies could simply issue stock to management and employees if they wanted, instead of options. That would solve the issue of how to value the compensation package. But then the companies would clearly have to label it as an expense.

"It's a black and white issue. The only people who would say that options aren't an expense are the ones that don't want to include it as an expense," said Howard Schilit, president of the Center for Financial Research and Analysis.

Some institutional investors have favored expensing, including the members of the Council of Institutional Investors -- who have $2 trillion under management -- and teachers' retirement fund TIAA-Cref, which manages $274 billion.

"If all options were valued and expensed, business decisions would be based on economics and not on accounting," TIAA-Cref Chairman John Briggs said in a statement.