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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host
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To: wooden ships who started this subject8/7/2002 9:40:59 PM
From: geode00  Read Replies (1) of 42834
 
Now those are some really big numbers to have to report. No wonder SV is balking.

From the WSJ:

More Companies Are Jumping
On Options-Expense Bandwagon

By AARON ELSTEIN

"But the impact is expected to be much greater among the young, fast-growing companies that doled out large amounts of options during the heart of the bull market to attract and retain employees. For example, Amazon.com Inc., said that changing its accounting policies would have widened its net loss last year of $567 million by an additional $396 million.

The impact could be even greater at other technology companies. For example, Yahoo! Inc., the Sunnyvale, Calif., Internet company, said in its most recent annual report that expensing stock-options would have widened its reported 2001 net loss to $983.2 million from $92.8 million. Its 2000 profit of $70.8 million would have been replaced by a $1.26 billion loss. Yahoo hasn't said if it will start expensing options and a spokeswoman couldn't be reached.

And Yahoo's numbers could be understating the full impact of expensing options. One reason: While the FASB has rules directing how companies should value options for their annual reports, companies say the valuation techniques don't work as well for options granted to employees as options that are bought and sold among traders who specialize in pricing such instruments. So some companies may be providing overly-conservative estimates of the costs of options in their annual reports."

At any rate, it seems as it public opinion is forcing expensing anyway so maybe it's a moot point until the next debacle comes along.
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