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Stock options to ripple through earnings

Just when you might have thought the raging debate about stock options was put to rest, it’s rearing its ugly head again.

That should become clear in earnings reporting season the next few weeks — the first time that most companies are required to deduct the cost of stock handed out to employees and executives. The changeover will have a dramatic effect on how earnings are reported to investors, and possibly sway stock prices.

"There will be some confusion," says David Zion, a research analyst who specializes on accounting issues for Credit Suisse. "It could be April Madness."

Wishful thinkers figured the changeover would be a snoozer on Wall Street, since it was so anticipated. But the issue is flaring up in unpleasant ways, such as:

By Matt Krantz, USA TODAY

Full Story: http://www.usatoday.com/money/markets/us/2006-04-05-option-bomb-usat_x.htm

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