Explain the accounting for convertible preference shares. Intermediate accounting 16a dilutive earnings per share. Chapter 16 dilutive securities and earnings per share 16. Convertible securities intermediate accounting cpa. Diluted eps is a performance metric used to gauge the quality of a companys earnings per share eps if all convertible securities were exercised. Dilutive securities and earnings per share 1 describe the accounting for the issuance, conversion, and retirement of convertible securities. Description multiple choice dilutive securities, conceptual. Moderate 1525 p161 entries for various dilutive securities. Dilutive securities and earnings per share earnings per. This playlist covers convertible securities, convertible bonds,convertible preferred stock and accounting for stock options. Stockholders equity and dilutive securities and earnings per.
Dilutive securities and earnings per share excel workbook templates. Ch16 kieso intermediate accounting solution manual slideshare. Once you have answered the questions, click on submit answers for grading to get your results. Earnings per share eps is the monetary value of earnings per outstanding share of common stock for a company in the united states, the financial accounting standards board fasb requires eps information for the four major categories of the income statement. It can also be looked at as the inverse of the normalized pe ratio.
Learn vocabulary, terms, and more with flashcards, games, and other study tools. Intermediate accounting 14 edition test bank by kieso issuu. The dilutive securities are then sequentially entered into the diluted earnings per share calculation according to the ranking. Rmd today announcedresults for its quarter ended june 30, 2015. Quiz material will be drawn from the chapters covered in class that day. Get the knowledge you need in order to pass your classes and more. Companies with complex capital structures will not report diluted eps if the securities in their capital structure are antidilutive. Dilutive securities securities and and earnings earnings per per share share. Securities such as convertible debt or stock options are dilutive because their features indicate that the holders of the securities can become common shareholders. Dilutive securities and earnings per share excel templates. Gaap and igaap are similar as to the presentation of eps, the boards have been working together to resolve remaining differences related to earnings per share computations. Company repurchased 941,000 shares in the fourth quarter.
When the firm has no potentially dilutive securities this is called a simple capital structure, the calculation of eps available to common stockholders is. Dilutive securities per share 16 dilutive securities and. Chapter 16 intermediate accounting 12th edition kieso, weygandt, and warfield. Eps only takes into account a companys common shares, whereas diluted eps takes into account all convertible securities such as convertible. The accounting guidance for the calculation and reporting of eps can be found in accounting standards codification asc 260, earnings per share, which provides for the calculation and. Start studying ch 16 dilutive securities and earnings per share.
Dilutive securities and earnings per share checklist of key figures. Slm corporation supplemental earnings disclosure june 30. Line items represent financial concepts included in a table. Professor paul zarowin nyu stern school of business. When the common shares are issued, there will be a reductiondilutionin earnings per share. The actual conversion of convertible securities or the exercise of options, warrants, or rights 6. If the bonds are converted at maturity, roche makes the following entry. Jan 01, 2011 chapter 16 dilutive securities and earnings per share 163 conversion of bonds at maturity. Diluted eps is a performance metric used to assess a companys earnings per share eps if all convertible securities were realized. Dilutive securities and earnings per share chapter 16 intermediate accounting 12th edition kieso. Read this essay on dilutive securities and earnings per share multiple choice. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. Added back to net income for both basic and diluted earnings per share. Stockholders equity and dilutive securities and earnings per share.
Chapter 16 1 prepared by coby harmon, university of california, santa barbara learning learning objectives objectives 1. Securities having the potential to increase common shares outstanding. The normalized earnings yield measures the normalized earnings per share that you receive for the price paid. Earnings per share being in existence for some years, questions on. Share premiumconversion equity 194,384 bonds payable 2,000,000 share capitalordinary 500,000 share premiumordinary 1,694,384 to record the conversion of bonds at maturity. Chapter 16 dilutive securities and earnings per share.
Restricted stock units and the calculation of basic and. The previous computation therefore provided the maximum dilution. Download our chapter 16 dilutive securities and earnings per share ebooks for free and learn more about chapter 16 dilutive securities and earnings per share. P1512 analysis and classification of equity transactions penn company was formed on july 1, 2012. Multiple potentially dilutive securities considered in computing diluted earnings per share 7. Earnings per share eps is the most common and most complex performance measurement that a publicly held company presents in its quarterly and annual reports. Securities, which upon conversion or exercise, increase earnings per share or reduce the loss per share. Basic and dilutive earnings per share are generally disclosed for such shares using the twoclass method. Normalized earnings yield can give another perspective to the profitability of a company. Start studying chapter 16 dilutive securities and earnings per share. These books contain exercises and tutorials to improve your practical skills, at all levels. Difference between convertible securities and stock warrants is that upon exercise of the warrants, the holder has to pay a certain amount of money to obtain the shares.
Come browse our large digital warehouse of free sample essays. Dilutive securities and earnings per share dilutive securities and compensation. The company computes earnings per share eps using a twoclass method, which is an earnings allocation formula that determines eps for i each class of common stock the company has a. Study 32 chapter 16 dilutive securities and earnings per share flashcards from olivia s. Chapter 16 dilutive securities and earnings per share optional assignment characteristics table item description be164 issuance of bonds with warrants. Quizzes will be graded and returned to student during the following class. Apr 24, 2011 dilutive securities and eps chapter 16 1. Starting with the most dilutive, earnings per share is reduced until one of the securities maintains or increases earnings per share. Indicate by check mark whether the registrant 1 has filed all reports required to be filed by section or 15d of the securities exchange act of 1934 during the preceding 12 months or for. Rmd today announcedresults for its quarter ended september 30, 2015. Try the following multiple choice questions to test your knowledge of this chapter. When an increase in earnings per share occurs, the security that causes the increase in earnings per share is excluded. Compute earnings per share in a simple capital structure.
File type pdf intermediate accounting chapter 16 solution intermediate accounting chapter 16 solution chapter 16. Tabular disclosure of the weighted average number of shares used in calculating basic net earnings per share or unit and diluted earnings per share or unit. Describe the accounting for the issuance, conversion, and retirement of convertible securities. Dilutive securities and earnings per share free download as powerpoint presentation. Schedule of antidilutive securities excluded from computation. Test bank for intermediate accounting, thirteenth edition. Oct 31, 2012 this intermediate accounting video explains dilutive earnings per share, weighted average shares outstanding, dilutive securities, earnings per share, and the treasury stock method. Deducted from net income for diluted earnings per share. Use the ifconverted method to compute diluted eps 5. In determining earnings per share, interest expense, net of applicable income taxes, on dilutive convertible debt should be added back to net income for basic earnings per share and ignored for diluted earnings per share. Schedule of antidilutive securities excluded from computation of earnings per share. Chapter 16 dilutive securities and earnings per share chapter 16.
Earnings per share calculation that requires dilutive securities be added to the denominator of the basic eps calculation. Apr 20, 2015 easily share your publications and get them in front of issuus millions of monthly readers. Use the treasury stock method to compute diluted eps 4. Dilutive securities and earnings per share powerpoint slides. Chapter 16 dilutive securities and earnings per share business acg 31 with lively at university of south florida studyblue. Chapter 16 12e update dilutive securities and earnings per share assignment classification table by topic topics questions brief exercises.
1172 472 617 251 1150 1500 676 1529 372 708 234 996 716 368 376 1402 290 1397 87 888 1369 903 832 1441 291 21 689 405 244 380 1035 871 166 1231 480 1488