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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (148796)	7/24/2002 6:54:01 PM
From: i-node	Respond to of 1577108

It would make some sense to count that as an expense, however if you do then you have to consider that earnings per share may no longer be a useful way to compare companies and their stocks. Maybe some more attention will have to be paid to cash flow rather then earnings per share. At one time, all earnings presentations had to have two kinds of EPS: "Earnings Per Common Share", and "Fully Diluted Earnings Per Common Share". These rules were established by APB16, I believe. And they made total sense -- you computed EPS based on the weighted average number of common shares outstanding, then a [perhaps] different figure based on the common shares that would be outstanding if all warrants, options, and convertibles were taken into account. I don't know at what point GAAP was modified to permit presentations without it. My vote would be to move back to simplicity. These problems came about as a result of the FASB trying to overpromulgate in an effort to make the accounting industry more exclusive (in my opinion, at least). As a CPA I voted numerous times to support these efforts, basically because I thought it was good for the profession. For years, I have wished I could have undone some of those votes, as we [the CPAs] were sold a bill of goods by the leadership of the AICPA, the FASB, and the former APB.