FASB Awaits "Thank You" from Microsoft Employees

If a company awards stock options and later reprices those options, FASB rules require that the repriced options must be charged against profits. In a small company where the value of the options is minimal, this might not make much of a difference to the bottom line. But if you happen to be Microsoft, and you're looking at having to offset your profits with a $30 billion adjustment over the seven-year life of the options, you may want to rethink the repricing strategy.

Microsoft issued options to its employees last summer, assuming the price of its stock would continue to rise. Instead, Microsoft's stock value dropped, the option price exceeded the market value of the stock, and employees weren't happy.

Instead of repricing the options, which would have resulted in the charge-off against profits, Microsoft issued new options. Issuing the new options circumvented the FASB charge-off rule. Microsoft is happy, the employees are happy, life is good...

You may like these other stories...

Treasury Secretary Lew to speak on tax reform, inversionsDamian Paletta of the Wall Street Journal wrote on Friday that Treasury Secretary Jacob Lew is planning a September 8 speech about a controversial corporate strategy...
Individuals interested in reviewing the proposed 2015 US Generally Accepted Accounting Principles (GAAP) taxonomy from the Financial Accounting Standards Board (FASB) have until October 31 to submit their written comments....
Ernst & Young 2013 audit deficiency rate 49%, regulators sayMichael Rapoport of the Wall Street Journal reported on Thursday that the Public Company Accounting Oversight Board (PCAOB) found deficiencies in 28 of the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.