Accounting for Earnings Per Share (3 hrs)

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Course Description

Accounting for Earnings Per Share

Earnings per share (EPS) is a popular and useful measure of a company’s profit performance. Companies with publicly held common stock or potential common stock must disclose their EPS information.  EPS tells you how much profit (or loss) each share of common stock has earned after adjustments for potential dilution from options, warrants, and convertible securities are factored in. This course covers the computation, reporting, presentation, and disclosure requirements associated with EPS as stipulated in ASC 260 Earnings Per Share. It includes excerpts from and references to ASC 260, and interpretive guidance. It also provides examples to illustrate the application. Finally, it includes insights from the Securities and Exchange Commission staff.

Course information

Price: $47
This course is included in our Mega CPE Special


Course No. 7019
Format: Online pdf (70 pages). Printed book available.
Instructional Delivery Method: QAS Self-Study
Prerequisites: None
Advance Preparation:None
Level: Overview
CPE Credit: 3 hrs.
Field of Study: Accounting: Technical
Course expiration:  You have one year from date of purchase to complete the course.
Course Revision Date: August 2022

Objectives

After completing this course, you should be able to:

  1. Identify the difference between two different capital structures—simple and complex
  2. Recognize how to compute basic earnings per share in a simple capital structure
  3. Recognize how to compute diluted earnings per share in a complex capital structure
  4. Identify the presentation and disclosure requirements of EPS data

Course Contents

I. OVERVIEW OF ASC 260
Basic Principles
U.S. GAAP vs IFRS
Subsequent Amendments

II. BASIC EPS
General Rules
Example 1: Basic EPS Calculation
Step 1. Determine the Numerator
Cumulative vs. Noncumulative Preferred Dividends
Example 2: Numerator Adjustment  Cumulative Preferred Dividends
Example 3: Numerator Adjustment  Noncumulative Preferred Dividends
Changes in the Carrying Amount of Redeemable Preferred Stock
Redemption or Induced Conversion of Preferred Stock
Example 4: Numerator Adjustment  Redeeming Preferred Stocks with Beneficial Conversion Feature
Redeemable Noncontrolling Interests
Equity-Classified Instruments with a Down Round Feature
Example 5: Freestanding Instruments with Down Round Features
Step 2. Determine the Denominator
Example 6: Weighted-Average Number of Shares Outstanding
Contingently Issuable Shares
Example 7: A Continued Service Requirement
Comprehensive Illustrations: Basic EPS

II. DILUTED EPS
General Rules
Distinguish between Dilutive and Antidilutive Security
Example 8: Dilutive or Antidilutive
Recognize Potential Common Shares
Contingently Issuable Shares
Example 9: Contingently Issuable Common Shares
Options and Warrants
Example 10: Treasury Stock Method
Written Put Options
Example 11: Reverse Treasury Stock Method
Convertible Securities
Example 12: If-Converted Method
Comprehensive Illustration 2: Diluted EPS

III. OTHER MATTERS
Application of the Two-Class Method
Stock Dividends and Stock Splits
Example 13: Stock Dividends and Stock Splits
Presentation and Disclosures
Presentation
Example 14: Presentation  Reporting Discontinued Operations
Disclosures
Example 15: The Reconciliation of the Numerators and Denominators for Basic and Diluted EPS
Interim Financial Reports
EPS Computations in an IPO
The Limitations of EPS
Failure to Reflect the Cost of Equity
Pro Forma EPS Confusion
Real-World Case: Inflated Quarterly EPS
Comprehensive Illustration 3: Two-Class Method of Computing Basic EPS

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What's your experience? We'd love to know!
chris petkiewicz
Posted 2 years ago
Good course

Kinda hard, but good

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