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The document analyzes the shift in investor sentiment regarding stock option accounting from the enactment of SFAS No. 123 in 1995, which required footnote disclosure of option expenses, to SFAS No. 123(R) in 2004, mandating that option costs be expensed in net income calculations. The study finds that investor attitudes shifted positively towards option expensing following high-profile accounting scandals like Enron, as investors began to associate such expensing with greater financial transparency and credibility. The research highlights a trade-off between the negative impact on reported income and the positive information effect from enhanced transparency, suggesting that the latter outweighed concerns about lower earnings. Overall, the findings indicate a significant change in how investors perceive stock options' impact on financial reporting over nearly a decade.