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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (2443)	4/23/2003 4:34:16 PM
From: Don Lloyd	Respond to of 10065

Pete, They can't be a true expense of companies because companies pay out zero cash for stock options If they paid out something else that had value TO THE COMPANY, it could be an expense without being cash. But stock and options have no scarcity value to the company since they can be replaced by creating new ones out of thin air without effective limit. Regards, Don

To: Boca_PETE who wrote (2443)	4/25/2003 4:01:46 AM
From: Math Junkie	Read Replies (1) \| Respond to of 10065

IIRC, the FASB said something like, "Options have value, and it's obvious that it should be counted as an expense when something of value is given away." Of course, what they conveniently forget to mention is where that value comes from: straight out of the portfolio values of the company's shareholders, NOT out of company coffers. Inventory has value, too. The same logic would say that when they sell products, they should have to charge as an expense the full selling price, not their actual costs. It's amazing to see politics infesting the accounting profession to such a degree. It shows no more integrity than letting the Enrons of the world get away with what they did, IMO.