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Politics : Ask Michael Burke

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To: Nadine Carroll who wrote (43208)	1/13/1999 1:42:00 PM
From: Mike M2	Read Replies (2) of 132070

Nadine, I'm not an accountant nor a lawyer so I will leave the issues of legality and GAAP compliance to the experts but I will say such practices are misleading to investors especially employee stock options accounting for the full story see Forbes mid -may 98 article anyone have the url handy for Nadine? In a nut shell the costs of employees stock options do not show up as an expense on the income statement instead they reduce shareholders equity and to the extent this is done the true earnings of a company are overstated because the employee compensation cost is understated. Currently this practice is in compliance with GAAP and legal but it is misleading. BTW look at the footnotes of the financial stmts in the 10k to see the impact of this practices. Mike

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