Sat, Aug 24, 2002 - Page 10 News List

Tech firms reconsider their options

WHAT TO COUNT Computer companies are hoping to avoid having to treat options as a cost by disclosing more about them and how they affect their earnings

BLOOMBERG , PALO ALTO, CALIFORNIA

Billionaire investor Warren Buffett and other proponents of expensing say companies inflate their reported profits by excluding the cost of options. Some advocates also say the current method of including estimated option costs in a footnote to financial statements encourages executives to manipulate earnings to boost the stock price.

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