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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Schuh who wrote (17372)	2/12/1998 3:39:00 PM
From: Charles Hughes	Respond to of 24154

Dan, I guess the relevant bit is this: "Entities electing to remain with the accounting in Opinion 25 must make pro forma disclosures of net income and, if presented, earnings per share, as if the fair value based method of accounting defined in this Statement had been applied. " And that is what MSFT did, the regular earnings report with the profit reflects the old rule 25, and the report showing a loss reflects the new accounting rules being applied. Most tech outfits will choose to stay under the old rules that show them making a profit, of course. Where they went beyond what was required is in giving the alternate report some modest publicity. Most of them must be burying these somewhere after they do them. I suppose the realities are that a lot of these companies, given their option situation, can't stop growing and cut back unless they find a way to drop their stock price suddenly to where most employees can't cash out, or find some other way to manipulate the situation to reduce at least the percentage of unfunded options. In fact, in retrospect, I think I was at a company where that may have happened. Bill G and the other execs holding so much stock, that's an unlikely scenario for MSFT, if they can help it. (But this would make insider sales that much more important to watch, yes?) Any accountants here want to comment? Chaz