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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (3686)	11/22/1998 8:48:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 4509

Mindmeld But it still shows up as dilutionof EPS. No! And that is the problem. The cost of granting an option is not considered an expense. Therefore it has no impact on earnings according to current GAAP accounting. That is a fact -- no conjecture. If you look at PeopleSoft's income statement you will not find a line item concerned with options activity. If you look at the cash flow statement you will see cash generated from the issuance of stock (that is the revenue generated by conversion of options) but you will not see a line item for the implied cost: the difference between the value of the stock and strike price of the option. Believe me Mindmeld, it is completely hidden. If you doubt me check with your CPA. TTFN, CTC