Accounting for stock-based compensation: an extended clean surplus relation

Residual income valuation is based on the assumption that the clean surplus relation holds. As pointed out by Ohlson (2000), among others, the standard clean surplus relation is frequently violated. Moreover, standard residual income valuation models rest on the implicit assumption that future stated earnings belong to current shareholders only. This is clearly invalid for companies granting employee options. In order to overcome these deficiencies, this paper establishes an extension of the clean surplus relation and derives simple analytical solutions for the value of outstanding stocks in terms of already known accounting information. --Residual income valuation,clean surplus accounting,US-GAAP,employee stock option programs

New economy accounting : why are broad-based stock option plans so attractive?

Several studies indicate that stock option plans are becoming more and more a substantial part of compensation schemes in U.S. companies. This paper shows the tax implications and accounting rules for stock option plans. By comparison of the tax and accounting rules for different compensation schemes we show that the popularity of stock options may be mainly due to the U.S. Generally Accepted Accounting Principles (US-GAAP) which require no charge to earnings for speciffically designed stock option plans if a company opts for footnote disclosure. Thus, for these companies the stated earnings are higher than their economical situations justify. Based on a case study of 20 companies out of the S&P 500 which rely heavily on employee stock options we arrive at the conclusion that the amount of hidden compensation cost can reach economically signifficant amounts. Since this topic seems to be widely neglected it is questionable whether stock prices reflect these hidden cost. --Accounting,US-GAAP,stock option programs

Accounting for Stock-Based Compensation: An Extended Clean Surplus Relation

Residual income valuation is based on the assumption that the clean surplus relation holds. As pointed out by Ohlson (2000), among others, the standard clean surplus relation is frequently violated. Moreover, standard residual income valuation models rest on the implicit assumption that future stated earnings belong to current shareholders only. This is clearly invalid for companies granting employee options. In order to overcome these deficiencies, this paper establishes an extension of the clean surplus relation and derives simple analytical solutions for the value of outstanding stocks in terms of already known accounting information

New Economy accounting: Why are broad-based stock option plans so attractive?

Several studies indicate that stock option plans are becoming more and more a substantial part of compensation schemes in U.S. companies. This paper shows the tax implications and accounting rules for stock option plans. By comparison of the tax and accounting rules for different compensation schemes we show that the popularity of stock options may be mainly due to the U.S. Generally Accepted Accounting Principles (US-GAAP) which require no charge to earnings for specifically designed stock option plans if a company opts for footnote disclosure. Thus, for these companies the stated earnings are higher than their economical situations justify. Based on a case study of 20 companies out of the S&P 500 which rely heavily on employee stock options we arrive at the conclusion that the amount of hidden compensation cost can reach economically significant amounts. Since this topic seems to be widely neglected it is questionable whether stock prices reflect these hidden cost

310-Helix Conformation Facilitates the Transition of a Voltage Sensor S4 Segment toward the Down State

AbstractThe activation of voltage-gated ion channels is controlled by the S4 helix, with arginines every third residue. The x-ray structures are believed to reflect an open-inactivated state, and models propose combinations of translation, rotation, and tilt to reach the resting state. Recently, experiments and simulations have independently observed occurrence of 310-helix in S4. This suggests S4 might make a transition from α- to 310-helix in the gating process. Here, we show 310-helix structure between Q1 and R3 in the S4 segment of a voltage sensor appears to facilitate the early stage of the motion toward a down state. We use multiple microsecond-steered molecular simulations to calculate the work required for translating S4 both as α-helix and transformed to 310-helix. The barrier appears to be caused by salt-bridge reformation simultaneous to R4 passing the F233 hydrophobic lock, and it is almost a factor-two lower with 310-helix. The latter facilitates translation because R2/R3 line up to face E183/E226, which reduces the requirement to rotate S4. This is also reflected in a lower root mean-square deviation distortion of the rest of the voltage sensor. This supports the 310 hypothesis, and could explain some of the differences between the open-inactivated- versus activated-states

Rare-isotope and kinetic studies of Pt/SnO2 catalysts

Closed-cycle pulsed CO2 laser operation requires the use of an efficient CO-O2 recombination catalyst for these dissociation products which otherwise would degrade the laser operation. The catalyst must not only operate at low temperatures but also must operate efficiently for long periods. In the case of the Laser Atmospheric Wind Sounder (LAWS) laser, an operational lifetime of 3 years is required. Additionally, in order to minimize atmospheric absorption and enhance aerosol scatter of laser radiation, the LAWS system will operate at 9.1 micrometers with an oxygen-18 isotope CO2 lasing medium. Consequently, the catalyst must not only operate at low temperatures but must also preserve the isotopic integrity of the rare-isotope composition in the recombination mode. Several years ago an investigation of commercially available and newly synthesized recombination catalysts for use in closed-cycle pulsed common and rare-isotope CO2 lasers was implemented at the NASA Langley Research Center. Since that time, mechanistic efforts utilizing both common and rare oxygen isotopes have been implemented and continue. Rare-isotope studies utilizing commercially available platinum-tin oxide catalyst have demonstrated that the catalyst contributes oxygen-16 to the product carbon dioxide thus rendering it unusable for rare-isotope applications. A technique has been developed for modification of the surface of the common-isotope catalyst to render it usable. Results of kinetic and isotope label studies using plug flow, recycle plug flow, and closed internal recycle plug flow reactor configuration modes are discussed

Low voltage to high voltage level shifter and related methods

A shifter circuit comprises a high and low voltage buffer stages and an output buffer stage. The high voltage buffer stage comprises multiple transistors arranged in a transistor stack having a plurality of intermediate nodes connecting individual transistors along the stack. The transistor stack is connected between a voltage level being shifted to and an input voltage. An inverter of this stage comprises multiple inputs and an output. Inverter inputs are connected to a respective intermediate node of the transistor stack. The low voltage buffer stage has an input connected to the input voltage and an output, and is operably connected to the high voltage buffer stage. The low voltage buffer stage is connected between a voltage level being shifted away from and a lower voltage. The output buffer stage is driven by the outputs of the high voltage buffer stage inverter and the low voltage buffer stage

Assessment of prosthetic aortic valve performance by magnetic resonance velocity imaging

Objectives: Magnetic resonance (MRI) velocity mapping was used to evaluate non-invasively the flow profiles of the ascending aorta in normal volunteers and in patients with an aortic (mechanical) valve prosthesis. Background: In patients with artificial aortic valves the flow profile in the ascending aorta is severely altered. These changes have been associated with an increased risk of thrombus formation and mechanical hemolysis. Methods: Velocity profiles were determined 30 mm distal to the aortic valve in six healthy volunteers and seven patients with aortic valve replacement (replacement within the last 2 years) using ECG triggered phase contrast MRI. Peak flow, mean flow and mean reverse flow were measured in intervals of 25 ms during the entire heart cycle. Systolic reverse flow, end-systolic closing and diastolic leakage volume were calculated for all subjects. Results: Peak flow velocity during mid-systole was significantly higher in patients with valvular prosthesis than in normals (mean±SD, 1.9±0.4 m/s vs. 1.2±0.03 m/s,P<0.001) with a double peak and a zone of reversed flow close to the inner (left lateral) wall of the ascending aorta of the patients. Closing volume was significantly larger in patients than in controls (−3.3±1.2 ml/beat vs. −0.9±0.5 ml/beat;P<0.001). There was reverse flow during systole in valvular patients amounting to 15.7±6.7% of total cardiac output compared to 2.3±1.2% in controls (P<0.001). Diastolic mean flow was negative in patients after valve replacement but not in controls (−11.0±15.2 ml/beat vs. 6.8±3.2 ml/beat;P<0.01). Conclusions: The following three major quantitative observations have been made in the present study: (1) Mechanical valve prostheses have an increased peak flow velocity with a systolic reverse flow at the inner (left lateral) wall of the ascending aorta. (2) A double peak flow velocity pattern can be observed in patients with bileaflet (mechanical) prosthesis. (3) The blood volume required for leaflet closure and the diastolic leakage blood volume are significantly higher for the examined bileaflet valve than for native heart valve