RSM221H1 Chapter Notes - Chapter 17: Dividend, Capital Structure, Stock Split
7 Nov 2016
School
Department
Course
Professor
Document Summary
Common shareholders need to know how much of a company"s available income can be attributed to the shares that they own. Helps them assess future dividend payouts and the value of each share. Common shareholders have a residual interest in the company. Basic eps looks at actual earnings and the actual number of common shares outstanding. 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. Eps = income available to common shareholders/weighted average number of common shares. Aspe does not require eps calculations or disclosures in the financial statements. Eps information is reported below income in the income statement. When the income statement presents discontinued operations, earnings per share should be disclosed for income from continuing operations, discontinued operations, and ni. The restatement"s effect should then be disclosed in the year of the restatement.
