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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (5948)	6/8/2002 2:45:32 PM
From: hueyone	Read Replies (1) \| Respond to of 6974

It wasn't until there was a huge political and public relations fiasco brought on by the Enron debacle that it became a significant issue for either of them. I don't know whether it was a significant issue at S&P prior to their recent core earnings release, but I know S&P has been working on development of their definition of a Core Earnings number for well over a year. The history with the FASB (Financial Accounting Standards Board) goes back many years. (Please read link below.) Back in 1994, FASB proposed that employee stock option compensation be considered a corporate expense. Our CEOs descended on Washington with bags full of money and got the proposal shut down. Senator Lieberman, who has proved particularly adept at lining his pockets with Silicon Valley money, even threatened to get the FASB shut down. So we ended up with a compromise----having the Black Scholes pro forma estimates buried in the financial notes of the 10ks once a year where no one can find them or understand them. Please read these two articles to gain some more historical perspective on the issue: levin.senate.gov Message 17249383 Accounting-rule writers grappled with the issue at least as far back as 1972. Not only weren't stock options widely used back then, but the challenge of calculating their cost was daunting. So officials decided that options needn't be treated as an expense. You are probably correct about the FASB not being independent, but they are supposed to be. <g>. I didn’t intend to give anyone in particular credit for solving the problem, (and it is far from being solved), but I do want to point out that the organizations and people that I named don't appear to be economically motivated to the same extent to find a flaw with the current accounting rules as those those tapped in to the stealth income pipeline are motivated to ignore a flaw in the current accounting rules. Best, Huey