The Cost of Options | The Mac Observer Forums

The Cost of Options

DawnTreader

Posted: 01 April 2004 09:33 AM

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Here’s an interesting look at the cost of stock options to Apple and other technology firms. The FASB is working on standards for the expensing of options and I don’t think it will be long before Apple adopts a policy of expensing options as a compensation expense.

Although there is not a direct disbursement of funds to realize as an expense, the difference between the stock trading price and the option strike price at the time the options are excercised represents a difference in funds received versus the issuance of new shares at the trading price.

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dmbream

Posted: 01 April 2004 05:51 PM

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[quote author=“dawntreader”]i don’t think it will be long before apple adopts a policy of expensing options as a compensation expense.

...or perhaps, exchanges a significant amount of outstanding options for restricted shares.

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DawnTreader

Posted: 02 April 2004 09:27 AM

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The rules would apply only to option grants after a particualar date so I don’t think a need will arise for changes to past grants. I suspect fewer options will be granted in the future but existing options most likely will remain the same.

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