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  • f3x4j8wl f3x4j8wl Jul 15, 2002 3:39 PM Flag

    Expensing stock options

    Just to clarify a point you made concerning options. Not all employees receive options.
    They are only distributed to personnel at
    certain job levels.

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    • Options would not be expensed upon issuance, but when exercised. There is no expense to issue, only when the company would have to make up the difference in strike price and the market value. Unless they are new shares then that is capital category. i'snt it?

      • 1 Reply to gdknowitall
      • Getting closer...though the previous mis-information here has reached new heights for the BB&T board

        Coke is planning on expensing options as they vest. This in turn would be represented by a liability on the balance sheet. That would have to adjusted annually as the underlying stock price changed.

        But you're correct, there is no expense until the option is exercised.

        The way the term stock option is thrown around by those who don't understand them is appalling. Many congressman don't have a clue about this. (no surprise). As Greenspan says...leave it to FASB.

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