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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host
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To: Kirk © who wrote (16391)8/5/2002 12:14:07 PM
From: Skeeter Bug  Read Replies (2) of 42834
 
**Cisco has several empty buildings in the SF Bay Area. What if they let some charities use the office space for free (if charities paid for all utilities, etc.)? Would that be an "expense" to the company or just a way to use their assets?**

i bet you cisco will still depreciate those properties. does that answer your question? it should. ;-)

**Now take it a step further. What if Cisco let its executives camp FOR FREE in the parking lot of an empty building. Should Cisco record an expense for the lost revenue they could charge for over night camping? I know that the IRS would like to see it recorded as income but one could argue they were allowed to camp for free since they are closer to the office...**

let's stay on track here and use similar examples. what if the company compensated their ceo with a monet picture they found underneath another picture that they got for free from a garage sale. they paid nothing for the monet. it is now worth $5,000,000.

did they give the ceo something that was worthless b/c the company itself didn't have to pay for it?

i think not. neither would the irs. neither would any *rational* person.

that is where the "free lunch" options "logic" falls apart.

this example much more closely mirrors the options game.
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