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Earnings Per Share

Earnings Per Share -Under GAAP and IFRS, all public entities -EPS on face of the I/S. simple capital structure- only common stock outstanding.
?Simple Capital Struc 1. Basic EPS = Income available to common shareholders (Net Income - Preferred Dividends) รท Weighted average number of common shares outstanding. 2. Income Available to Common Shareholders: Deduct: dividends declared on non-cumulative preferred stock (regardless of whether paid or not) and (2) dividends accumulated-cumulative preferred stock (regardless of if declared).
?WACSO -Weighted Number of Common Shares Outstanding: Shares sold or reacquired during the period (including treasury stock) weighted time outstanding.
?Stock Dividends & Stock Splits as though they occurred at the beginning of the period for EPS. -effects of dividends and splits retroactively adjusted for comparability with prior periods. Splits- no JEs, changes par & share OS. Dividends- JE d) RE, c)CS & PIC
?Complex Capital Structure -potentially be converted securities to dilute EPS
?Dilution From Options, Warrants & Equivalents -Appl -Previously reported EPS should not retoractively adjusted in the case of options or similar instruments to reflect subsequent changes in market prices of the C/S.
?Treasury Stock Method 1. If the average market price of the stock is greater than the 2. Also assume that the proceeds received (option or exercise price) are used to purchase common shares at the average market price during the period. 3. When the average market price is in
?Dilution from Convertible Securities -"If-Converted" method should be used which assumes that the securities were converted to common stock at the beginning of the period (or at times of issue if later). 1. Convertible Bonds: Add to the numerator, the interest expense, net of tax, due to th
?Dilution from Contracts Settled in Cash or Stock -If a contract may be settled in either stock or cash at the election of either the entity or the holder, the facts available each period determine whether it is reflected in the computation of EPS.
?Dilution from Contingent Shares -Contingent shares (that are dilutive) are also included in the calculation of b 1. If the necessary condtions have been satisfied by the end of the period, those shares are included in basic EPS as of the beginning of the period in which the conditions
?Disclosure -Cash flow per share should not be reported. Basic and diluted EPS for both income from continuing operations and net income and the effects of discontinued operations and extraordinary items. 1. Reconciliation of the numerators and denominators of the b
Created by: tsp7c
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