Re:MS doesn't actually turn a profit.
on
Microsoft's Future
·
· Score: 1
--armb, in another article in this thread, mentioned the URL http://www.ecommercetimes.com/perl/story/4526.html , where the author states that all taxable income was sheltered from taxes due to providing employee stock options.--
Which, from what I know about it, is an incorrect interpretation. Microsoft doesn't have to account for compensation cost of options until they are exercised. Some claim that this can overstate income by not having the options valued on an ongoing basis. MS, in their 10k, also provides a pro-forma financial statement using an alternative accounting method that is being pushed by the International Accounting Standards Board as a better way to account currently for those outstanding options. In this pro forma method, MS still has a tax liability.
--You wouldn't happen to work for Microsoft, now would you?--
No, I don't, nor have I in the past.
--In any case, it's noteworthy that this is your first posting.--
Should I have posted something else first?
Re:MS doesn't actually turn a profit.
on
Microsoft's Future
·
· Score: 4, Informative
--How so? Well, look at their taxes. They don't pay any tax on profit because they report no profit.--
Well, checking their financial reports for the last 3 years shows they paid more than 30% of their Revenue as tax. Check the audited financial statements.
-- How? They claim the value of stock options used to pay employees as expense. Between that and cash outlays, they are losing money, and have been for years.--
Actually, what is claimed as a liability is the money reserved for income tax payments on exercised options. Options are considered compensation, but the amount of the compensation cannot be determined until they are exercised, therefore Microsoft has to hold money in a long term liability account to cover the expense of the exercising of options as they occur.
--The stock market is not a source of investment for them, but primary revenue.--
Actually, they lost money on investments this year but still have a positive Net Revenue (i.e. Profit).
-- They are being supported by the wishful thinking of their employees, who still think the stock will resume its growth, and so are willing to accept stock options as pay.--
Microsoft pays salaries on par with the leaders in the industry, and gives employee great benefits as well. The fact that they grant options in addition to that is even better.
Slashdot Mirror
--armb, in another article in this thread, mentioned the URL http://www.ecommercetimes.com/perl/story/4526.html , where the author states that all taxable income was sheltered from taxes due to providing employee stock options.--
Which, from what I know about it, is an incorrect interpretation. Microsoft doesn't have to account for compensation cost of options until they are exercised. Some claim that this can overstate income by not having the options valued on an ongoing basis. MS, in their 10k, also provides a pro-forma financial statement using an alternative accounting method that is being pushed by the International Accounting Standards Board as a better way to account currently for those outstanding options. In this pro forma method, MS still has a tax liability.
--You wouldn't happen to work for Microsoft, now would you?--
No, I don't, nor have I in the past.
--In any case, it's noteworthy that this is your first posting.--
Should I have posted something else first?
--How so? Well, look at their taxes. They don't pay any tax on profit because they report no profit.--
Well, checking their financial reports for the last 3 years shows they paid more than 30% of their Revenue as tax. Check the audited financial statements.
-- How? They claim the value of stock options used to pay employees as expense. Between that and cash outlays, they are losing money, and have been for years.--
Actually, what is claimed as a liability is the money reserved for income tax payments on exercised options. Options are considered compensation, but the amount of the compensation cannot be determined until they are exercised, therefore Microsoft has to hold money in a long term liability account to cover the expense of the exercising of options as they occur.
--The stock market is not a source of investment for them, but primary revenue.--
Actually, they lost money on investments this year but still have a positive Net Revenue (i.e. Profit).
-- They are being supported by the wishful thinking of their employees, who still think the stock will resume its growth, and so are willing to accept stock options as pay.--
Microsoft pays salaries on par with the leaders in the industry, and gives employee great benefits as well. The fact that they grant options in addition to that is even better.