Chapter 16 dilutive securities and earnings per share ifrs questions are available at the end of this chapter answer t f t f f t f t f t f f t f t f t f t f no. Chapter 16 dilutive securities and earnings per share learning. No theoretical justification for recognizing a gain or loss when exercised. Contrast the accounting for stock warrants and for stock warrants issued with other securities. Start studying chapter 16 dilutive securities and eps. Chapter 16 intermediate accounting 12th edition kieso, weygandt, and warfield. Dilutive securities and earnings per share excel templates. Dilutive securities and earnings per share describe the accounting for the issuance, conversion, and retirement of. Chapter 16 dilutive securities and earnings per share 16 3 conversion of bonds at maturity. Intermediate accounting ifrs edition kieso, weygandt, and warfield. Chapter 16 dilutive securities and earnings per share chapter 16. Included in this category are convertible securities, options, warrants, and other rights.
Dilutive securities and earnings per share dilutive. The weighted average number of equity shares outstanding during the. Complex structurepotentially dilutive securities are present. Explain the accounting for convertible preferred stock. Bob anderson, ucsb 2004 16 1 dilutive securities and earnings per share chapter 16 bob anderson, 2004 16 2 6a refresher eps earnings. Lo 6 compute earnings per share in a simple capital structure. Chapter 16 25 lo 7 compute earnings per share in a complex capital structure.
Solution 16 9b a complex capital structure exists when a corporation has convertible securities, options, warrants, or other rights that upon conversion or exercise could dilute earnings per share. Earnings per share complex capital structure e1626 eps with options. Dilutive securities and earnings per share powerpoint slides. Nov, 2019 this playlist covers convertible securities, convertible bonds,convertible preferred stock and accounting for stock options. Basic eps one problem with a basic eps computation is that it fails to recognize the potentially dilutive impact on outstanding stock when a corporation has dilutive securities in their capital structure. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Convertible securities are potentially dilutive securities and part of diluted earnings per share if their conversion increases the eps numerator less than it increases. Comprehensive earnings per share example slide content. Starting with the most dilutive, earnings per share is reduced until one of the securities maintains or increases earnings per share.
Weighted average number of common shares outstanding. Chapter 16 delutive securities and earnings per share. Securities that upon conversion or exercise increase earnings per share or reduce the loss per share. Describe the accounting for the issuance, conversion, and retirement of convertible securities. Chapter 16 dilutive securities and earnings per share overview during the past four to five decades, many corporations have engaged in heavy merger activity.
After studying this chapter, you should be able to. A free powerpoint ppt presentation displayed as a flash slide show on id. Dilutive securities and earnings per share excel workbook templates. Nov 08, 2018 starting with the most dilutive, earnings per share is reduced until one of the securities maintains or increases earnings per share. Section 2 computing earnings per share section 2 computing earnings per share section 2 computing earnings per share section 2 computing earnings per share illustration 16 7 illustration 16 7 chapter 16 36 lo 6 compute earnings per share in a simple capital structure. Earnings per share complex capital structure diluted eps includes the effect of all potential dilutive common shares that were outstanding during the period. Truefalse dilutive securities conceptual answer no. Convertible debt convertible bonds can be changed into other corporate securities during some specified period of time after issuance. Even the order in which dilutive securities should be included in the computation of. Reporting additional consideration to encourage conversion. Chapter 16 handout free download as powerpoint presentation. Earnings per share pdf download identify all potentially dilutive securities. Chapter 16 dilutive securities and earnings per share studocu.
Problems item descriptionp16 144 convertible bonds and stock warrants. The diluted earnings per share computation assumes the conversion or exercise of all potentially dilutive securities that are not antidilutive. Reporting additional payment to encourage conversion. Companies with dilutive securities report both basic eps and diluted eps in their income statements. Dilutive securities and earnings per share chapter 16 16 2 at the holders option benefit of a bond guaranteed interest and principal privilege of exchanging it for shares bonds which can be changed into other corporate securities are called convertible bonds. Delutive securities delutive securities atau dilutive sekuritas adalah sekuritas yang dapat diubah menjadi saham biasa sehingga dapat meningkatkan total saham yang beredar. Ch16 kieso intermediate accounting solution manual slideshare. Convertible securities, options, warrants, and other securities, are often called dilutive securities because upon exercise they may reduce dilute earnings per share. Additional shares for purposes of diluted earnings per share. Chapter 16 dilutive securities and earnings per share learning objectives after studying this chapter. Truefalsea dilutive securitiesa conceptual answer no.
The basic earnings per share computation uses only the weightedaverage of the ordinary shares outstanding. Chapter 16 1 prepared by coby harmon, university of california, santa barbara learning objectives. Dilutive securities and 16 earnings per share 16 14 convertible preferred stock includes an option for the holder to convert preferred shares into a fixed number of common shares. Intermediate accounting chapter 16 dilutive securities and. Dilutive securities and earnings per share chapter 16 intermediate accounting 12th edition kieso. Lo 7 compute earnings per share in a complex capital structure. Jan 01, 2011 chapter 16 dilutive securities and earnings per share 16 3 conversion of bonds at maturity. Chapter 16 12e update dilutive securities and earnings per share assignment.
Chapter 16 handout earnings per share option finance. 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. Volume 2 c h a p t e r 16 dilutive securities and earnings per share intermediate accounting ifrs edition kieso, weygandt, and warfield. These business combinations have utilized an selection from problem solving survival guide for intermediate accounting, 15th edition, instructors manual. Earnings per share contents disclosure of diluted earnings per share both including and excluding extra. Bab 16, dilutive securities and earnings per share. Apr 02, 2017 chapter 16 dilutive securities and earnings per share assignment classification table by topic topics questions brief exercises exercises problems concepts for. Earnings per share and addresses practical application issues that kpmg member.
Describe the accounting for the issuance, conversion, and retirement of convertible selection from intermediate accounting, 15th edition book. Chapter 16 dilutive securities and earnings per share. Chapter 16 dilutive securities and earnings per share learning objectives after studying this chapter, you. Ch16 dilutive securities and earnings per share chapter 16. The per share effect is evaluated by examining the. When an increase in earnings per share occurs, the security that causes the increase in earnings per share is excluded. Chapter 16 dilutive securities and eps flashcards quizlet. Compute earnings per share in a simple capital structure. Chapter 16 dilutive securities and earnings per share assignment. Classified as part of stockholders equity, unless mandatory redemption exists.
If the bonds are converted at maturity, roche makes the following entry. Chapter 16 dilutive securities and earnings per share key. E1622 eps with convertible bonds and preferred stock. Per share effect of 10% convertible preference shares ifconverted method, diluted earnings per share illustration 16 b6 16 106 lo 9 compute earnings per share in a complex situation. Standard is on the denominator of the earnings per share calculation. Upon conversion or exercise by the holder, the dilutive securities reduce dilute earnings per share. Ch16 chapter 16 solution for intermediate accounting by. Debt and equity should companies report these instruments as a liability or equity convertible preference share options securities shares. The previous computation therefore provided the maximum dilution.
Chapter 16 dilutive securities and earnings per share learning objectives after studying this chapter, you should be able to. Company reports both basic and diluted earnings per share. Dilutive securities and earnings per share password protected assets. Chapter 16 dilutive securities and earnings per share truefalse dilutive securities conceptual answer no. Dilutive means the ability to influence the eps in a downward direction.
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