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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.07

-1.4%

3:59 PM EST

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To: rkral who wrote (64618)	9/15/2003 10:41:58 PM
From: Don Lloyd	Read Replies (2) of 77397

Ron, The issue currently before the FASB and IASB is relative to option grants. Stock grants are already expensed. So what's the point in presenting a stock grant scenario? Two reasons. First, stock options would be of no value if they weren't eventual claims to stock. Stock is essentially equivalent to an option with a zero exercise price and no expiration. In most cases, if not all, arguments that relate to the expensing of options apply equally well to the expensing of stock. Secondly, the fact that expensing stock grants happens to be the current practice doesn't make it any more valid or correct. Neither new stock or option grants should be expensed. Regards, Don

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