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

To: Lizzie Tudor who wrote (62934)	2/5/2003 3:33:34 PM
From: paul_philp	Respond to of 77400

Lizzie, Replace 'stock grant' with 'stock option' in the same scenario - an opportunity cost and a clear expense. Stock options have a value and so should be expensed. However, while the means of determining that value very wildly, why would anyone change their practices. It is a mess and all the pontification in the world doesn't make it less messy. Paul

To: Lizzie Tudor who wrote (62934)	2/5/2003 8:18:36 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

Lizzie, the key to all of this debate is to think like a real owner of the company. If you owned a small company, you'd think twice about diluting your ownership by handing out stock options. The reason is that you'd want a very clear method for determining how much those options were costing you. You'd want that cost to be reflected somewhere, either in the cash flows statement or the income statement, so that you'd know where you were spending your money. If you didn't track it and you started seeing your networth either steadily erode or not increase as fast as the financial statements were telling you, I'm pretty sure you'd be upset. So the same is true here. We all just want the costs of doing business to be unequivocably and transparently recorded in the financial statements.