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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs

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To: rkral who wrote (74)6/18/2002 10:52:40 AM
From: Gary L. KeplerRead Replies (2) of 786
 
Perhaps the following poster can be drawn into a discussion. Check out his profile using the link below:

"once they implement proper expense accounting of options"

As it happens, I think I have more practical experience with expense accounting of options under FAS 123 than anyone else in the US. Based on that experience, I'd say it's generally about as realistic as Enron accounting. You have to estimate factors like future volatility and option life that there is no sensible way to estimate. For some imploding telecom companies in 2002, there was actually a net credit from option expenses because of the impact of all their employee terminations and consequent option forfeitures causing a reversal of prior-year expenses. Is that really a number you want folded into reported earnings?

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