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I did not read the article - but that seems quite obvious - so the interesting thing would be the other side 'why SBC was not in GAAP expenses originally?'.
by zby 6y ago
I did not read the article - but that seems quite obvious - so the interesting thing would be the other side 'why SBC was not in GAAP expenses originally?'.
- ponker 6y agoWhen GAAP was developed stock-based compensation was not used nearly as widely as it is now, and was seen as more of a special item for a footnote.
- drc500free 6y agoI think because the GAAP metaphor is that revenues and expenses determine profits, which accumulate into equity, which is claimed by equity holders according to fully diluted shares. SBC was "supposed" to be accounted for by calculating dilution of the newly issued shares. The expense approach is basically a shortcut for analysts.