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Technology Stocks : Apple Inc.

AAPL 277.24

-0.3%

3:39 PM EST

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To: JP Sullivan who wrote (55854)	8/13/2006 1:28:08 PM
From: Cogito	Read Replies (2) of 213176

>>If options are treated as an expense, won't that reduce profit? If so, why will there be additional taxes? I should have thought that taxes would decrease along with profit. I don't doubt that you've got it right--I just can't figure out why taxes would increase.<< Winston - I have doubts that I have that right myself, actually. It's just something I've seen being mentioned as a possibility. I think the options are already being treated as expenses, at least starting from a certain point, and that nobody is going to force companies to declare them as expenses retroactively. And even if they did, higher expenses means lower earnings and lower taxes. Like you, I can't figure out how backdating options leads to the company owing higher taxes. But remember that Apple has said that the restatements of past reporting periods may involve "significantly higher expenses and revenues". Where the additional revenues come in, I don't know. Rather a confusing set of issues. - Allen

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