Wanda, "Stock repurchasing does not count as an operating cost or operating expense"
Now you are talking! Tell me more about GAAP! LOL!
Here it comes!
"Net Income is defined as net revenue minus operating costs and expenses."
Aha, "is defined"...what does "is" mean?
"Therefore, money spent on stock repurchasing..."
Now I am confused ;-)
It must be my poor English comprehension.
Does not expression "money spent on..." means
that the money were paid to someone else?
Now, dictionary.com
ex·pense (k-spns)
n.
Something spent to attain a goal or accomplish a purpose: an expense of time and energy on the project.
========================
So, money were spent to accomplish the purpose of
labor compensation and were "deducted" from
Intel's assets, but, according to you, this does
not create a loss in income.
Brilliant! When Intel makes money, it increases
Intel assets. But when the money are spent from some
account, they decrease the assets, but
suddenly become somehow different!
So, one hand is makng $200M of money, another hand
is spending $1000M of the same money, from the same
company... Helloooo! Can we have some consistency
here?
"I also suggest that you look to official government financial forms, such as the one I recently linked to, rather than looking at a press released write-up."
Maybe you better take your own advice and get a little
re-acquainted with the history of the subject:
Forbes Magazine, May 18, 1998:
"To the degree that options are used
as incentives to attract and keep
talented workers, they are, properly
speaking, a labor cost. But
accounting standards do not require
a company to run the costs of
issuing these options through its
income statement as an expense.
Thus, companies that count on
options to recruit and keep
employees are understating labor
costs and overstating earnings."
forbes.com
This must be quite a bit of earnings overstatement
for Intel, when profit turns to be huge losses...
- Ali |
