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To: carranza2 who wrote (125874)	12/5/2002 7:23:17 PM
From: hueyone	Read Replies (2) \| Respond to of 152472

As I appreciate it (I'm no options expert, by the way), there is no cost per se to the company when it issues options. The cost to it takes place when they are exercised and the company has to sell the employee a share of stock worth, say, $50, in the open market for the theoretical option price of $10. You are siding with the article I posted by Rueven Brenner and Donald Luskin. Their position is that there is no cost at issue and only a cost at exercise. While some scholars argue over where and when the best place to expense options is, I have never seen someone make the argument before, who accepts that notion that options are a legitimate cost, that options can only be a legitimate cost at exercise. I have seen others argue that it may be better to value the option cost at date of exercise instead of date of grant, but never that expensing at date of grant is completely illegitimate while expensing at date of exercise is legitimate. The majority of scholars, imo, appear to not only feel there is a cost at issue, but are agreeable to proposals by FASB and IASB to expense stock options at date of grant using Black Scholes. While I did say that I could live with these authors' proposed solution----that is expensing stock options at exercise and also tracking expected stock option expense in the liability section of the balance sheet---marked to market quarterly, I did find a peculiar flaw in the logic the authors used to refute expensing at time of grant: The author's write: Yes, the company has conveyed something of real value to the executive -- an option contract that the executive would have had to pay money for if he'd bought the same thing from a third party. But the company received something of value, too: the executive's commitment to work for the company, and probably at lower up-front wages than would otherwise be the case. It's an even trade -- so when the option is first issued there is no net cost, not even an intangible one. Peculiar logic indeed. By that logic wages should not be an expense either. After all, the company is engaged in an even trade when they proffer wages for services rendered. Best, Huey

To: carranza2 who wrote (125874)	12/5/2002 7:45:45 PM
From: Jim Mullens	Read Replies (2) \| Respond to of 152472

carranza2- Thanks for your response. I'm no expert on options either. I think part of the problem is that there are too many experts and not too many agree. Sorta like economists. This somewhat follows your thinking- 1. No cost to the company if issued from treasury stock & therefore no expense. There is however a potential dilution to existing shareholders if & when exercised. However, at the time of issuance, (as is current practice) the EPS is calculated based on the diluted shares. 2. If treasury stock is not available and stock buy-back on the open market is required, book that cost as an expense. Book the balance sheet entry as an Investment Asset, reduce the shares outstanding (increases the EPS) , and treat the newly purchased shares as treasury stock until reissued . 3. When the stock options are reissued from the newly acquired treasury stock, reduce the balance sheet- Investment Assets, and follow same procedure (#1), above. Does the purchase of stock in your own company not qualify as an investment asset, whereas the purchase of stock of another company does qualify as an investment asset? It seems as it should, but others feel that options (share grants) issued from treasury stock should be expensed when the company really did not incur any out of pocket costs. Maybe these questions should be answered by philosophers rather than accountants / economists. Does this make any sense?

To: carranza2 who wrote (125874)	12/5/2002 11:09:11 PM
From: elmatador	Respond to of 152472

The CDMA market "has been something that is very very sour for us," conceded Nokia's executive vice president of mobile phones, Anssi Vanjoki, at the conference. "To get traction in CDMA, it's not something that's magic -- it's a lot of hard work. We have taken challenge of CDMA and really tried to align our processes with the processes of the marketplace." Vanjoki added, "Our strategic intent is clearer than ever." In the U.S., Nokia announced last week that it plans to begin selling a CDMA-based phone on the Sprint PCS network. It currently sells only five CDMA handsets, three of which operate on next-generation CDMA2000 1X networks. Color models aren't due until next year. thestreet.com