Paint Yahoo! Red on Options Costs

For Yahoo! (YHOO Quote), how to account for employee stock options is a $483 million question.

As the company revealed in its annual report issued Friday, Yahoo!'s reported $42.8 million net profit for 2002 would have swung to a $440.1 million loss under the accounting treatment that a growing number of U.S. companies have adopted since mid-2002.

The difference once again illustrates the vast impact that different accounting procedures, including those covering options-based compensation expense, can have on a company's bottom line. ...