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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: rkral who wrote (130132)	7/11/2003 4:23:22 PM
From: Wyätt Gwyön	Respond to of 152472

rkral, Many believe the actual* expense is what you call the forecasted ("ex-ante") expense. That includes the FASB as evidenced by the SFAS 123 "fair value method".* fwiw, i agree with that perspective. ironically, it is usually the options apologists who insist that there is no cost except the ex poste intrinsic value. this is of course what the company ultimately "leaves on the table", but ex ante, we have no way of knowing what that figure will be at expiry, and since we want to know what the co's economic value is based on its current outlook (not the rearview mirror ten years down the line), the Black Scholes formula which is used in the real world of options trading provides a useful proxy. (of course MSFT's move to allow employees to cash in their out of the money options is one more nail in the intellectually bankrupt coffin of the options apologists who pretend options are worth nothing.) btw, i would recommend Alex Berenson's The Number, published recently, for an excellent discussion of the options issue and the degradation of corporate accounting over the years in the US.