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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 683.310.0%Nov 12 4:00 PM EST

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To: Haim R. Branisteanu who wrote (26447)9/21/1999 12:23:00 AM
From: Berney  Read Replies (3) of 99985
 
Haim, Re: Stock Options

When a FASB committee started looking at this issue several years ago, they received an absolute storm of protest from the Big Boyz, and rightfully so IMHO. To imply that stock options are not expensed is poppycock. As with any other expense, options are expensed when they are incurred; that is, sum certain and fixed in amount. Currently, they are generally reflected as a compensation expense when exercised by the employee, after the associated "strings" have been satisfied.

I believe a change on this issue will not go beyond adequate disclosure in the form of a note to the financial statements. If they are required to be expensed at the time of issuance, I believe it will only be done with the blessing of the Big Boyz. I'm sure they are tired of losing quality employees that become paper millionaires. More importantly, it would obliterate their competition from the innovative start-ups that cannot afford to pay the cash salaries to attract the quality talent.

A change would only lead to a whole new set of game playing.

Just a View from the (very wet) Swamp

Berney
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