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To: HighTech who wrote (38923)8/13/2002 12:10:15 PM
From: Casaubon  Respond to of 52237
 
Aren't options already expensed in the financial statements? Don't accounting standards require expensing at the grant date already?

No. However, when options are exercised, the employee buys out the option from the company, and that counts as income on the books.



To: HighTech who wrote (38923)8/13/2002 12:41:24 PM
From: Casaubon  Read Replies (1) | Respond to of 52237
 
usatoday.com

current rules require firms to use Black-Scholes to say in the footnotes of financial statements what they would have earned had options been expensed. It's not precise but close enough, says Martin Sullivan of Tax Analysts. Even if an item's value can't be exactly measured, it still is worth something. "It's like valuing a car — we can argue on the exact amount — but it does have value," says Sullivan.


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