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

To: GVTucker who wrote (64099)	5/21/2003 9:44:54 PM
From: RetiredNow	Read Replies (2) \| Respond to of 77400

Absolutely. That much is clear. But did you notice how they are treating that expense? They are estimating the charge based on the current value of employee options. Then they are doing a quarterly true up. So most of these tech companies claim that their is no good way to value stock options. Yet here we have a case of them not only valuing them, but also expensing the end result, followed by true-ups. So if it's good enough for FIN 42 and variable interest investments, why isn't it good enough for employee stock options? That's the question.

To: GVTucker who wrote (64099)	5/22/2003 7:35:56 AM
From: rkral	Read Replies (1) \| Respond to of 77400

GVTucker, re "The only reason Cisco is expensing in this case is because FIN 42 requires them to do so. It has more to do with acquisition accounting than it does with stock options expensing. " FIN 46 raised the gun and FIN 44 aimed it .. then FIN 25 and FIN 28 pulled the trigger .. because Andiamo's options are variable stock options. IMO, if Andiamo had fixed stock options, Cisco wouldn't be expensing them. And if Cisco granted variable stock options, they would have to expense them too .. even if no acquisition occurred. Regards, Ron [Edit: Andiamo stock-based compensation may include awards other than variable stock options.]