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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (5184)	5/26/1998 3:31:00 AM
From: Skeeter Bug	Respond to of 42834

pete, let me use an analogy. if intel is due $1 million from a loan related to intellectual property and decides to forgive $900k, what happens to the $900k? does it show up on the income statement as an expense? so the company gives its employees $1 million in stock and has agreed to forgive the $900k and only receive $100k from the transactions, what happens to the $900k? is it accounted for differently? in one case, intellectual property is given in return for 10% of its market value. in the other case, company ownership is given in return for 10% of its market value. is the $900k accounted for in the same way? why? in both cases, something of agreed value was given by the company for a fraction of its market value - even though no dollars actually left the company, in either case. i realize hiding employee compensation costs is really neato and increases reported eps. so does barons. that's not the point. the point is whether there is a more accurate way to reflect a businesses operations (not equal but differently executed compensation plans) on an ongoing basis.