Chapter 16 - Dilutive securities and earnings per share. After completing this chapter you should be able to: Describe the accounting for the issuance, conversion, and retirement of convertible securities, explain the accounting for convertible preferred stock, contrast the accounting for stock warrants and for stock warrants issued with other securities. | Prepared by Coby Harmon University of California, Santa Barbara Intermediate Accounting Intermediate Accounting Prepared by Coby Harmon University of California, Santa Barbara Westmont College INTERMEDIATE ACCOUNTING F I F T E E N T H E D I T I O N Prepared by Coby Harmon University of California, Santa Barbara Westmont College kieso weygandt warfield team for success PREVIEW OF CHAPTER Intermediate Accounting 15th Edition Kieso Weygandt Warfield 16 Discuss the controversy involving stock compensation plans. Compute earnings per share in a simple capital structure. Compute earnings per share in a complex capital structure. After studying this chapter, you should be able to: LEARNING OBJECTIVES Describe the accounting for the issuance, conversion, and retirement of convertible securities. Explain the accounting for convertible preferred stock. Contrast the accounting for stock warrants and for stock warrants issued with other securities. Describe the accounting for stock compensation plans under generally accepted accounting principles. Dilutive Securities and Earnings per Share 16 Dilutive Securities Stock Options Convertible Securities Preferred Stock Should companies report these financial instruments as a liability or equity. LO 1 Debt and Equity (at the holder’s option) Benefit of a Bond (guaranteed interest and principal) Privilege of Exchanging it for Stock Convertible bonds can be changed into other corporate securities during some specified period of time after issuance. + LO 1 Dilutive Securities Accounting for Convertible Debt To raise equity capital without giving up more ownership control than necessary. Obtain debt financing at cheaper rates. Two main reasons corporations issue convertibles: Accounting for Convertible Debt LO 1 The accounting for convertible debt involves reporting issues at the time of (1) issuance, (2) conversion, and (3) retirement. At Time of Issuance Accounting for Convertible Debt Recording convertible bonds follows the method . | Prepared by Coby Harmon University of California, Santa Barbara Intermediate Accounting Intermediate Accounting Prepared by Coby Harmon University of California, Santa Barbara Westmont College INTERMEDIATE ACCOUNTING F I F T E E N T H E D I T I O N Prepared by Coby Harmon University of California, Santa Barbara Westmont College kieso weygandt warfield team for success PREVIEW OF CHAPTER Intermediate Accounting 15th Edition Kieso Weygandt Warfield 16 Discuss the controversy involving stock compensation plans. Compute earnings per share in a simple capital structure. Compute earnings per share in a complex capital structure. After studying this chapter, you should be able to: LEARNING OBJECTIVES Describe the accounting for the issuance, conversion, and retirement of convertible securities. Explain the accounting for convertible preferred stock. Contrast the accounting for stock warrants and for stock warrants issued with other securities. Describe the accounting for stock compensation .
