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Employee Stock Options Must be Treated as Expenses

Jonny Royale Re:Tax Implications? (325 comments)

From the FAQ from the FASB:

Q: Does the statement change US TAX Law?

A: No. US Tax Law is established by the US Government. This statement has no impact on either federal or state tax law.

Basically, the tax you calculate and pay is based on tax laws, wich are different than FASB standards. The tax liability is brought back into the balance sheet, but it's calculated spearately, for tax purpouses.

more than 9 years ago

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Closed source as efficency: As promised.

Jonny Royale Jonny Royale writes  |  more than 9 years ago Closed source WORKS. Deal with it. Here's why:

In a standard economic model, a person makes something (a pice of code, a shoe, a car, whatever). Now, in a macroeconomic sense, that person is required to be compensated for their effort. The easiest, most direct model of compensation is money. That money, which exists as an abstract of value, allows that person to redeem their efforts for other items they require (food, clothing shelter). Now, here's the problem with the Open source model:

The same person creates the same piece of code, only they make it open source. So, people are free to use and distribute it WITHOUT compensation to the original creator. The only way the original creator can be compensated is IF they: a) need something and b) the person who has or creates what they need is ALSO willing to utilize the same model, and the balance of effort outputed is equaled to the benifits inputted.

To use an example, imagine a programmer who writes a paricularly interesting piece of code as a dot on a graph. As the code that programmer writes spreads, links form between them and the people who use that code, creating a sort of star pattern. For example, Microsoft writes Windows XP, and sells it to the consumer. Now, in a closed source envirnment, the outer edgens of those links must immediately return assets (money, trade) to the center for the creation of that link (a la software lisencing). In an open source model, those people on the outer edges of those links don't have to create any reciprocity to the center for the assets received. They can take, and give nothing. The hope, and (in my opinion) it's a thin one at that, is that the center of that pattern will need something, and that something will out them at the outside of ANOTHER pattern, and that enough of these patterns will congregate to create a cohesive, self sustaning whole. But, in the reality we live in, the maximum efficiency is optainined when the return on the effort is immediate to the distribution of the effort. This allows for a minimum of waste in the time difference bentween the creation of goods, and the compensation received for their use and increasing efficency amoungst their users.

To put it another way, imageine the same graph. One the close source side, there is a single link bentween the developer and the consumer. On the Open source side, there is a potentially endless series of links between the producer and the producre's consumption. From an efficency standpoint, one will beat everything else, except 0, which cannot exist in a society that trades amoungst individuals.

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