Chap 16 - EPS

Other eps differences relate to 1 the treasury stock

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Unformatted text preview: hares. IFRS requires that share settlement must be used, while GAAP gives companies a choice. The FASB project proposes adopting the IFRS approach, thus converging GAAP and IFRS in this regard. Other EPS differences relate to (1) the treasury-stock method and how the proceeds from extinguishment of a liability should be accounted for, and (2) how to compute the weighted average of contingently issuable shares. IFRS SELF-TEST QUESTION All of the following are key similarities between GAAP and IFRS with respect to accounting for dilutive securities and EPS except: a. the model for recognizing stock-based compensation. b. the calculation of basic and diluted EPS. c. the accounting for convertible debt. d. the accounting for modifications of share options, when the value increases. IFRS SELF-TEST QUESTION Which of the following statements is correct? a. IFRS separates the proceeds of a convertible bond between debt and equity by determining the fair value of the debt component before the equity component. b. Both IFRS and GAAP assume that when there is choice of settlement of an option for cash or shares, share settlement is assumed. c. IFRS separates the proceeds of a convertible bond between debt and equity, based on relative fair values. d. Both GAAP and IFRS separate the proceeds of convertible bonds between debt and equity. IFRS SELF-TEST QUESTION Under IFRS, convertible bonds: a. are separated into the bond component and the expense component. b. are separated into debt and equity components. c. are separated into their components based on relative fair values. d. All of the above....
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This note was uploaded on 04/02/2014 for the course MGA 302 taught by Professor Ampadu during the Spring '09 term at SUNY Buffalo.

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