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