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Who gains from this big push to expense options, and why are they bringing it up now?

Everybody who is interested in having companies report their real earnings gains. Why now? Because politicians normally blinded by the wishes of campaign contributors are for a short window in time motivated (for crass political reasons) to act in the public interest.

All American companies ALREADY expense their options.

They expense them for taxes at the time granted (reasonable) and never as an expense vs. current earnings for financial purposes (I believe). You seem to believe they are expensed at time of exercise. I don't think you are right (does anyone, here, know for sure). In any event, expensing them at exercise (while better than not at all) does not reflect an expense at the time it is incurred. This misstates earnings. Anyway, the reason I think you are wrong is because Bill Parrish (who knows more than either of us) has been calling attention to this problem for many years and describes it as "the greatest pyramid scheme of all times." He states that Microsoft would have incurred losses for the last 5-7 years if it reported stock options as incurred. You ought to check out Bill Parrish's site>

"They expense them for taxes at the time granted (reasonable) and never as an expense vs. current earnings for financial purposes (I believe). You seem to believe they are expensed at time of exercise. I don't think you are right (does anyone, here, know for sure). In any event, expensing them at exercise (while better than not at all) does not reflect an expense at the time it is incurred. This misstates earnings. Anyway, the reason I think you are wrong is because Bill Parrish (who knows more than either of us) has been calling attention to this problem for many years and describes it as "the greatest pyramid scheme of all times."

You've just demonstrated by saying the above that you don't understand options.

That's the problem. There are lots of neophytes running around screaming that we must "expense options" as if they knew what they were talking about.

They don't, nor does Bill Parrish.

If you want to understand options, I'll be happy to explain them. If you just want to parrot ridiculous sound bites, then let me know so that I don't waste my time on you.

I can say this without too much effort, however: companies have to use their cash resources to pay for administrative overhead and actual "exercising" expenses of options. There is no current legal way to keep those real expenses off of American accounting books.

But change the rules so that companies are forced to guess at what the final value of an option will be at some point in the future (care to predict the precise price of a stock for March of 2003?), and then there WILL be a way to hide the actual expenses from American accounting books.

Forcing companies to "expense options" on the day that options are issued, prior to when they are exercised (as opposed to today's system that expenses options only when/if they are exercised so that the precise value of the option is known) would literally force companies to engage in a practice that makes large-scale corporate embezzelment child's play.

Who gains from this big push to expense options, and why are they bringing it up now? - Southack

"Everybody who is interested in having companies report their real earnings gains." - Duece

BWWWAAAAAHA ha ha!

The real expenses for stock options can only be precisely known AFTER the options have been exercised. That's how our system works today.

In contrast, if we change the accounting rules to make companies "expense" options prior to those options being exercised, then companies will have to GUESS at the final value of those options.

Call it what you will, but GUESSING at expenses is NOT the same as knowing the actual expenses.

In my opinion, GUESSING at the final value of options is a far WORSE system than what we have today.

This whole craze about "expensing options" is a push to make companies start placing guesses into their accounting books. That's a process that is ripe for corporate abuse.