March 23, 2001

Mr. Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549-0609

Re: File Number S7-04-01
Disclosure of Equity Compensation Plan Information

Dear Mr. Katz:

The Financial Reporting Committee of the Institute of Management Accountants (IMA) appreciates the opportunity to comment on Disclosure of Equity Compensation Plan Information (the "Release" or the "proposed rule"). While we are supportive of the Securities and Exchange Commission's efforts to improve financial reporting, we do not support the SEC proposed requirements and believe that the proposed rule should not be adopted. In our opinion, its requirements are contrary to other initiatives that the Commission and the accounting profession have undertaken to simplify disclosures and to eliminate redundancies in financial reporting.

We believe that instead of increasing the overall volume and level of detail of financial reports, the Commission should focus on streamlining reporting and reducing redundancies. The recently issued report of the GAAP-SEC Disclosure Requirements Working Group, which is part of the Business Reporting Research Project sponsored by the Financial Accounting Standards Board (FASB), might be helpful in this regard. The working group was asked to (1) find situations in which disclosure requirements in generally accepted accounting principles (GAAP) and the SEC's rules overlap and (2) to suggest ways to eliminate the redundancies in the future. We believe that requiring additional information about equity compensation plans in proxy statements or annual reports on Form 10-K or 10-KSB would increase the redundancy between GAAP and SEC disclosure requirements since FASB Statement No. 123 (FAS 123), Accounting for Stock-Based Compensation, currently requires sufficient disclosures about stock-based compensation arrangements in an entity's financial statements.

In the Release, the Commission asserts that the disclosure required by FAS 123 is not necessarily effective since it is not consistently available in any one location or format. It cites as the basis for this statement a study performed by the Investor Responsibility Research Center that found about 20% of the companies surveyed did not disclose the number of shares available for future awards under their employee stock plans. In our view, this is hardly enough evidence to require registrants to provide the significantly increased disclosures that are proposed by the Commission. Further, it has not been our experience that companies' disclosure of information required by FAS 123 is ineffective nor consistently unavailable.

We would be pleased to discuss our comments with you at your convenience.


John J. Perrell III, CPA
Financial Reporting Committee