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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (137132)	7/20/1999 1:12:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

I think we agree on the issue of the superiority of cash flow accounting. But even using cash flow accounting you cannot discern how much options "liability" exists since it is all effectively buried in the equity section. The technique of selling put options is common among many tech companies (e.g., MSFT), and the lack of proper accounting is a travesty. I think that the FASB and the SEC need to revisit this issue. I believe that the purpose of accounting is to provide the owners and other users of financial data with a fair representation of the financial status of the company. Current GAAP accounting standards fail miserably in this regard. Furthermore, the true cost of doing business is understated by this glaring lack of visibility. There is a cost associated with the issuance of employee stock options and there is no explicit accounting for that cost on the income statement. Instead, shareholders are expected to carry that cost implicitly through dilution of their equity. Tech companies are steadfast in their opposition to changing the accounting. My guess is that their reason is to prevent shareholders from knowing the truth about earnings. If it were in my power I would eliminate stock options as a form of employee compensation and substitute cash bonuses. That way we would know exactly what the operating costs are without changing the accounting rules. TTFN, CTC