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To: Boca_PETE who wrote (30851)	2/19/2002 11:26:18 AM
From: Stock Farmer	Respond to of 99280

Pete, a good articulate reply over on the Cisco thread. My response there to the specifics siliconinvestor.com Good, but not wholely satisfying. The accounting presents a perspective from which we must similarly conclude "employees received no value" from stock options. That is, if the company (shareholders) parts with no value, then how is it that employees receive value? More importantly, we ask the question "if there is value, who provides it, and to whom?" The actual value is provided by shareholders. Period. And we know the size of the value. The IRS issued the company a tax credit. Why? Because the company (shareholders) parted with a non-cash something that nevertheless has a realizable net value. So while there may be legitimate and somewhat academic reasons for the current accounting treatment to be classified as "correct", I submit that it is also equally classifiable as "misleading". At least from the perspective of a shareholder comparing one company's economic results to another. As to whether or not the black-scholes method of computing value is adequate, I don't think so. I happen to believe that the company should be disclosing actual cost and benefit received in the year that it happens, not in the year that the contract is issued. Same as recognition of revenue. John