Nguyên lý kế toán - Chapter 19: Share - Based compensation and earnings per share

Share-Based Compensationand Earnings Per ShareChapter 19Share-Based CompensationCompensation: Salary Stock awardsStock Award PlansRestricted stock plans Usually tied to continuing employment. Compensation is market price at date of grant. Compensation expense accrued over service period. Stock Option PlansStock option plans give employees the option to buya specified number of shares of the firm's stock,at a specified exercise price,during a specified period of time. The fair value is accrued as compensation expense over the service period for which participants receive the options, usually from the date of grant to when the options become exercisable (the vesting date). Earnings Per Share (EPS)Of the myriad facts and figures generated by accountants, the single accounting number that is reported most frequently in the media and receives by far the most attention by investors and creditors is earnings per share.Simple Capital Structure(Basic EPS)Basic Earnings Per Share Net income (after tax) – Preferred dividends* Weighted-average outstanding common stock *Current period’s cumulative preferred stock dividends (whether or not declared) and noncumulative preferred stock dividends (only if declared). Number of shares outstanding× Number of months outstanding ÷ 12 Weighted-average shares outstandingStock Dividends and Stock SplitsCommon shares issued as part of stock dividends and stock splits are treated retroactively as subdivisions of the shares already outstanding at the date of the split or dividend.Earnings Available toCommon ShareholdersComplex Capital Structure(dual EPS)Dilution/Antidilution TestStockOptionsConvertible securitiesTreasury stock methodIf-converted methodContingently issuable sharesPotential Common Shares Stock options, rights, and warrants Convertible bonds and stock Contingent common stock issuesDiluted Earnings Per ShareMay Report Basic and Diluted Earnings Per ShareOptions, Rights, and WarrantsProceedsUsed toPurchase treasury sharesAt average market priceThe treasury stock method assumes that proceeds from the exercise of options are used to purchase treasury shares. This method usually results in a net increase in shares included in the denominator of the calculation of diluted earnings per share.Convertible Securities The if-converted method is used for convertible debt and equity securities.The method assumes conversion occurs as of the beginning of the period or date of issuance, if later. SummaryFinancial Statement PresentationReport EPS data separately for:Income from Continuing Operations Separately Reported ItemsDiscontinued OperationsExtraordinary ItemsNet IncomeEnd of Chapter 19