3-10-11 Solution-10

3-10-11 Solution-10 - Q16-27. iGAAP and U.S. GAAP are...

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Q16-27. iGAAP and U.S. GAAP are substantially the same in the accounting for dilutive securities, stock-based compensation, and earnings per share. For example, both iGAAP and U.S. GAAP follow the same model for recognizing stock-based compensation. That is, the fair value of shares and options awarded to employees is recognized over the period to which the employees’ services relate. The main differences concern (1) the accounting for convertible debt. Under U.S. GAAP all of the proceeds of convertible debt are recorded as long term debt. Under iGAAP, convertible bonds are “bifurcated”, or separated into the equity component— the value of the conversion option—of the bond issue and the debt component; (2) a minor differences in EPS reporting—the FASB allows companies to rebut the presumption that contracts that can be settled in either cash or shares will be settled in shares. iGAAP requires that share settlement must be used in this situation; (3) other EPS differences relate to the treasury stock method and how the proceeds from
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3-10-11 Solution-10 - Q16-27. iGAAP and U.S. GAAP are...

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