Читать книгу Wiley GAAP: Financial Statement Disclosure Manual - Joanne M. Flood - Страница 115

Example 7.18: Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) attributable to holders of common shares of the Company by the weighted average number of common shares of the Company outstanding during the applicable period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares of the Company were exercised or converted into common shares of the Company. Common share equivalents are excluded from the computation of diluted earnings per share if their effects would be anti‐dilutive.

For the year ended June 30, 20X2 and 20X1, the effect of potential shares of common stock of the Company was dilutive since the exercise prices for options and warrants were lower than the average market price for the related periods. As a result, a total of 321,231 and 18,200 of unexercised options and warrants were dilutive for the year ended June 30, 20X2 and 20X1, respectively, and were included in the computation of diluted EPS.

Example 7.19: Loss per Common Share Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Convertible promissory notes as at December 31, 20X2 are likely to be converted into shares, however, due to losses, their effect would be antidilutive. As of December 31, 20X2, convertible notes outstanding could be converted into 91,250 shares of common stock.