A billion-dollar boost for Facebook – New accounting rules could mean huge returns for tech companies

Somewhere in California Mark Zuckerberg is smiling. That’s because earlier this week his company saw a $934 million reduction in its income-tax provision all coming from a new rule affecting the accounting for stock payments to employees.

And Facebook isn’t alone. The new rules affect all companies like Microsoft and other corporations that rely on employee stock compensation as incentive. And with this week’s announcement of close to a billion dollars – expect more to get on board.

But with accounting rules like this – who wins, who pays and obviously, someone out there must be making up the difference? Is this good for the economy or just another example of how enormous companies are finding ways of paying fewer and fewer taxes?

Clever accounting is never simple to explain – that’s where the Kelly School of Business can help.

Laureen Maynes is the Executive Associate Dean of Faculty and Research at The Indiana University’s Kelly School of Business. Laureen is an expert in the fields accounting and financial services and is a leading opinion on this topic. She can help explain how companies are reaping hundreds of millions of dollars in benefits and why it is allowed. Simply click on her icon to arrange an interview.

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