How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 477.74

-2.5%

Dec 3 3:59 PM EST

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To: Exacctnt who wrote (71936)	7/31/2002 5:21:33 PM
From: jonkai	Read Replies (3) of 74651

Tell us how they will calculate the number of diluted shares used in calculating diluted earnings per share. lets make this really simple, lets see what the company says in their own link about how they are going to report options and how much this is going to cost them in diluted earnings per share..... this is really not that hard, they used to use the "treasury stock method" and now they are getting a new set of earnings numbers, because they are using a new method for accounting for stock options........ did you think that they just decided to make up a new rule? they are using a GAAP accounting rule, the one that MSFT chooses to ignore in their reports to the street..... did the title of FASB Statement No.123 which is ("Accounting for Stock-Based Compensation") throw you some how for a loop? investor.mbia.com MBIA will also adopt the recognition provision of FASB Statement No.123 ("Accounting for Stock-Based Compensation") that requires the recognition of the cost of stock options, granted in the current year, in the income statement. The full year income statement effect of expensing stock options granted this year will be approximately $.01 per share. In addition, the amortization of prior year stock option expenses will approximate $.06 per share on a pro-forma basis, resulting in a total full year effect upon core earnings of $.07 per share. FASB 123 references the new method they are going to use.... which is a "fair value" method.... as opposed to the "treasury stock method" did the title ("Accounting for Stock-Based Compensation") somehow mislead you? where you decided not to look it up? it requires the recognition of the cost of stock options.... and gives the green light for a different way of expensing and reporting employee stock options...., it references "the fair value method" specifically as a replacement for it's old method....

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