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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: geode00 who wrote (16432)8/8/2002 3:53:14 PM
From: geode00  Read Replies (1) of 42834
 
Intel won't expense options.

From the WSJ:

"Earlier Thursday, Intel said it will continue accounting for employee stock options using the intrinsic-value method. This method adds no cost to the company's bottom line, and, Intel says, is a more accurate reflection of operations.

Many high-tech companies, including Intel and Microsoft Corp. (MSFT), have used stock options as a way to build company loyalty and retain talent, especially in their early days.

Under current U.S. accounting rules, companies have a choice between adding the fair value of options to their income statements as a compensation expense or disclosing their fair value in footnotes, which Intel does.

Howard High, an Intel spokesman, told Dow Jones Newswires the company's latest announcement is too recent for it to judge how the decision is playing with the public.

But he said if the company could get the question of how to account for the options back in the hands of accountants and separated from the issue of executive compensation, "we'd be happy."...

Intel has long argued that there is no good valuation model to determine the fair value of unexercised stock options, and that including an unreliable estimate of the options' fair value would distort earnings."
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