diet coke for breakfast

Monday, August 30, 2004

Posted by Tanstaafl
SEC: Let FASB set options policy

I think this is probably right. First of all, I don't think options should be expensed (not that I get any but that's a different story). The price that companies pay for options is the dillution of share holder value. For instance, EPS are much lower. If new shares are issued, each share holder has a smaller piece of the earnings, and the share price will likely fall.

But, that being said, If Congress starts getting more involved in setting Accounting regulations, they'll just get more complicated, more arcane, and will likely become more, not less, distortive of companies' performance. That will, in turn, distort markets.


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