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To: LLCF who wrote (179945)7/15/2002 2:36:51 PM
From: Don Lloyd  Read Replies (1) of 436258
 
DAK,

1.) There are all sorts of examples in accounting where treatment depends on 'size' of capital change... takeovers vs investments etc.
2.) My point is, it doesn't HAVE to be a 'cash expense'... there are lots of non-cash expenses.
3.) Of course they can still cross entered in the capital account.

The rules of arithmetic apply equally well to one penny as to $1B. Double counting is double counting.

Cash salaries flow out from the company. Stock grants attach new owners to the company. Any effect on a per share calculation can only be used in the numerator OR the denominator. Although it seems silly, it would do less violence to logic to adjust the numerator for a grant expense, but it is completely off the wall to then adjust the share count denominator as well.

Regards, Don
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