How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 413.63

+3.2%

Feb 9 3:59 PM EST

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To: jonkai who wrote (71938)	8/1/2002 7:23:44 AM
From: rkral	Read Replies (1) of 74651

jonkai, the "fair value method" optionally replaces the "intrinsic value method" in GAAP accounting per FASB FAS 123. The FASB circa 1994 intended to make this replacement mandatory. It would probably have succeeded, if lobbyists had not succeeded in getting Congress to intervene. Consequently, most companies have continued to use the intrinsic value method. Why? They love the resulting $0 option grant cost. As to the crux of your discussion with Exacctnt: 1) the "fair value method" evaluates the option grant cost, 2) the "treasury stock method" evaluates the dilution shares used to calculate "diluted EPS". Both are used .. and required. One does not replace the other. They are apples and schmapples. Just my 2 cents. Ron

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