Stock buybacks by U.S. Nonfarm Nonfinancial Corporations reached an annual level of $208.8 billion in Q3 2004, 76.6% higher than the frantic pace of buybacks at the peak of the Great Bubble in 2000.

The level of buybacks was 3.3 times corporate profits after taxes and dividends — an indication of how anxious corporate executives were to give value to stock options before FASB 123 accounting rules kick in later this year.

Profits before taxes in Q3 2004 were 20% higher than in 2000, but buybacks expanded by 77%.

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On December 16, 2020, the Financial Accounting Standards Board issued rulings on the expensing of stock options.

According to the FASB, this rule:

"addresses users’ and other parties’ concerns by requiring an entity to recognize the cost of employee services received in share-based payment transactions, thereby reflecting the economic consequences of those transactions in the financial Statements".

Although the concerns of some may be addressed, the underlying problem is ignored.

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The Financial Accounting Standards Board (FASB) has postponed the implementation of compulsory expensing of stock options for six months, until June 15, 2020.

For details, see the article on the FASB web site.

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