To: ken5050
When corporations issue stock options they are a liability, just like issuing a bond or stock, why shouldn't they be marked to market and treated like any other financial instrument for tax and accounting reasons?
To: The Vast Right Wing
In that case, why not also have a corporation treat an unused credit line as an expense? Options amount to much the same thing.
To: The Vast Right Wing
When corporations issue stock options they are a liability, just like issuing a bond or stock, why shouldn't they be marked to market and treated like any other financial instrument for tax and accounting reasons? Because at time of issue, the issuer doesn't know the value of the option until it is exercised. That value could increase, in which case the issuer get's a writeoff, or the value could decrease, in which case they don't.
21 posted on
07/17/2002 10:12:53 AM PDT by
Starwind
To: The Vast Right Wing
Stock options are not a liability. Liabilities are obligations to transfer goods or services in the future based on past transactions or events. An obligation to issue stock is not a liability.
50 posted on
07/17/2002 11:43:25 AM PDT by
TheCPA
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson