Pas 33 Flashcards
(11 cards)
If preference shares are cumulative, how many years of dividends are deducted when computing Basic EPS?
A) Only the dividends declared
B) All past dividends in arrears
C) Only one-year dividend, whether declared or not
D) No dividends are deducted
C
When computing the weighted average number of outstanding ordinary shares, how are treasury shares treated?
A) As a negative value from the acquisition date and a positive value from the reissuance date
B) As a positive value from the acquisition date and a negative value from the reissuance date
C) Ignored in the calculation
D) Always averaged as a positive value
A
Ordinary shares issued for cash are averaged starting from which date?
A) The date the shares are authorized
B) The date the shares are issued
C) The date cash becomes receivable
D) The end of the reporting period
C
If an entity undergoes a share split, how is it treated in the computation of the weighted average number of shares?
A) Averaged from the date of the split
B) Averaged prospectively from the split date
C) Ignored in EPS computation
D) Averaged retrospectively from the original issuance date
D
If an entity undergoes a share split, how is it treated in the computation of the weighted average number of shares?
A) Averaged from the date of the split
B) Averaged prospectively from the split date
C) Ignored in EPS computation
D) Averaged retrospectively from the original issuance date
D
Potential ordinary shares are considered dilutive when:
A) Their conversion increases basic EPS
B) Their conversion decreases basic EPS or increases basic loss per share
C) They are issued at a price higher than market value
D) They are not exercised by the reporting date
B
If preference shares are non-cumulative, how are dividends treated in Basic EPS computation?
A) All dividends, declared or not, are deducted
B) No dividends are deducted
C) Only the dividends declared are deducted
D) All past dividends are deducted
C
When computing Diluted EPS, which of the following is added back to profit or loss?
A) After-tax interest expense on convertible bonds
B) Dividends on preference shares
C) Unrealized gains on investments
D) All interest expenses
A
Which of the following transactions does not affect the weighted average number of shares?
A) Issuance of shares for cash
B) Declaration of cash dividends
C) Purchase of treasury shares
D) A share split
B
A company has a basic loss per share. When considering potential ordinary shares for diluted EPS, what happens?
A) All potential ordinary shares are included
B) Potential ordinary shares are ignored if they would decrease the loss per share
C) The same number of shares is used as in Basic EPS
D) Diluted EPS is always calculated, regardless of the impact
B
