Somebody brought up stock options.
The controversy they cited was the IRS requiring their cost in cost sharing and service costs, but will foreign tax authorities?
From where I sit stock options aren't something that can be adequately valued. They're more of an incentive to perform and make the company more profitable, because if the company is more profitable then the stock (and therefore the options) become more valuable. Their value isn't intangible, it's theoretical and therefore immeasurable.
Am I wrong?
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The FAS 123 crowd would suggest that while valuation of employee stock options is more difficult than the textbook Black-Scholes model suggests, a reasonable estimate of valuation is possible. Your discussion, however, goes beyond valuation as to why a multinational issues this form of compensation. In my view, another controversy that needs more discussion is which legal entity or entities benefit from this issuance - whic may more directly go to the controversy between tax authorities as to how much of this expense (if any) should be pushed out from the US parent company to the foreign subsidiary.
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