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To: Lizzie Tudor who wrote (178365)	6/24/2004 9:46:11 AM
From: willcousa	Respond to of 186894

No we don't run companies to serve the accountants but the accountants do run FASB to serve themselves. I agree that ESPP's are not at risk here. Are you sure that most ESPP's are necessarily affected by the options expensing issue? As long as stocks are made available to employees at or near market value they are probably not going to be considered to be in the nature of or to have option-like aspects. If a company invests in options to try and reduce its' cost of stock acquisition that is another matter. You can see that in action if you look at Dell's 10k's. Will

To: Lizzie Tudor who wrote (178365)	6/24/2004 10:44:47 AM
From: GVTucker	Respond to of 186894

Lizzie, RE: I asked on this thread and others on SI what ESPPs had to do with options expensing and nobody could tell me. Now I know, after digging on my own. Well, maybe you know, but I sure don't. The AEA says that stock option expensing will affect ESPPs, but they don't say why. Stock option expensing will not change a firm's cash flow at all. The AEA states this on their "Issues" page: If stock option expensing is mandated, many high-tech companies will not be able to provide options to rank and file employees, the primary recipients of stock options. Nowhere do they state why. This is very typical for Silicon Valley. They make a claim with no support. Stock options expensing does not change cash flow. One of the primary reasons that companies use stock options, particularly in their infancy, is to preserve cash flow, so it is clear that this is a cash flow issue. Silicon Valley continues to fight a straw man, and that is why I don't see much credibility in the point.