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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (60785)8/7/2002 8:21:30 AM
From: RetiredNow  Respond to of 77397
 
OK Thread, here's a thought. I believe that stock options given to employees are really just another form of equity financing engaged in by the company and the employees are just prospective shareholders. Therefore, a good way to account for options is just like any company would account for a new share offering.

Upon exercise this would be the entry.
Debit:
Cash
Discount to Market
Credit:
Addtnl Paid In Capital
Common Stock

As far as at the time of grant, I don't believe the company makes any entry whatsoever, except maybe a footnote. That's how it would be handled if options derivatives were created in the market right? Just a thought.



To: Raymond Duray who wrote (60785)8/7/2002 10:06:13 AM
From: GraceZ  Respond to of 77397
 
Of course, they are a dilution to ownership. They are on most income statements under fully diluted shares and on the balance sheet under stockholders equity.

See this income statement and tell me they aren't there, they are:

biz.yahoo.com

Where they don't belong is under expenses.


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