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Wiley GAAP 2013: Interpretation and Application of Generally Accepted Accounting Principles by Joanne M. Flood

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CHAPTER 28

EARNINGS PER SHARE

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Simple Capital Structure

Computational guidelines

Numerator

Denominator

Preferred stock dividends payable in common shares

Effect of preferred stock dividends payable in common shares on computation of EPS

Complex Capital Structure

Diluted earnings per share

Identification of potentially dilutive securities

Convertible securities

Options and warrants

Participating securities and two-class common stocks

Financial instruments with characteristics of both liabilities and equity

Contingent issuances of common stock

Computation of DEPS

Exceptions

Dual presentation of EPS

Examples of EPS Computation—Complex Capital Structure

Participating Securities and the Two-Class Method

Presentation and disclosure

Participating security defined

Allocating earnings and losses

Two-class method

Effect of Contracts That May Be Settled in Stock or Cash on the Computation of DEPS

Inclusions/Exclusions from Computation of DEPS

The Effect of Contingently Convertible Instruments on DEPS

Consolidated DEPS

Partially Paid Shares

Effect of Certain Derivatives on EPS Computations

Effect on EPS of Redemption or Induced Conversion of Preferred Stock

EPS Impact of Tax Effect of Dividends Paid on Unallocated ESOP Shares

Earnings Per Share Implications of ASC 718

Presentation

Rights issue

Restated EPS

Year-to-date diluted EPS

Other Disclosure Requirements

Comprehensive Example

PERSPECTIVE AND ISSUES

Earnings per ...

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