Ebay Stock Options

Topics: Security, Bond, Income statement Pages: 1 (366 words) Published: April 16, 2011
Because eBay is dependent on key personnel; and that, they had experienced some personnel turnover, they anticipated continued losses would result in significant harm (i.e., loss of future business). eBay’s future success depended upon their ability to attract, train, retain, and motivate various highly skilled personnel (e.g., technical, managerial, marketing and customer not be successful in attracting, integrating or retaining sufficiently qualified personnel. As a result of job candidates often considering the value of stock options plans with the goals to attract, motivate, and retain its employees. eBay adopted the 2001 Plan to provide a means by which its affiliates, consultants, directors, and employees may have an opportunity to purchase their common stock. eBay anticipated that this 2001 Plan would assist the company in retaining the services of persons capable of filling such positions which seems as an appropriate reason for eBay to compensate employees with stock options rather than other forms of compensation. eBay’s accounting treatment for their employee stock options can serve as an incentive, as well as a potentially lucrative bonus.  Normally it would be appropriate to answer [no] to the question, “Is footnote disclosure an appropriate substitute for financial statement recognition?” Usually, a footnote disclosure is in support of financial statement and it cannot be substituted for statement recognition. Further, it normally supports what is already stated in the statement and cannot be independent or a substitute for financial statement. However, a company like eBay does not report their stock options expenses in the financial statements but they include information in the footnotes. In example, t the information is not listed on the financial statements. In this case, it is appropriate because reporting stock options expenses is not a stand alone or an independent reporting. It is just in support of the overall stock holding pattern and...
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