ACCT 3340 Lecture Notes - Lecture 17: Shares Outstanding, Net Income, Stock Split
21 Dec 2015
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Earnings per sahre disclosures help investors by indicating the amount of income that is earned by each common share o. Basic eps: looks at actual earnings and the actual number of common shares outstanding o. Diluted eps: is a what-if calculation that takes into account the possibility that financial instruments, such as convertible debt and options might have a negative impact on existing shareholder returns and therefore the share"s value. Basic calc = net income available to common shareholders (naics) / Aspe does not require eps calculations or disclosures in f/s. When income statement presents discontinued operations, eps should be disclosed for income from continuing operations, discontinued operations and net income o. Loss from discontinued operations, net of tax: (sh. 60) Net income: . 40: if a corporation"s capital structure is complex, eps presentation would include basic and diluted eps: Objective of eps o: when period"s earnings include discontinued operations, per share amounts should be shown for both basic and diluted:
