CFA Practice Question

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CFA Practice Question

The if-converted method of computing earnings per share (EPS) data assumes conversion of the applicable securities as of the ______.

A. beginning of the period reported, or at the time of issuance if later
B. beginning of the period, regardless of issuance date
C. mid-way point of the period reported
Correct Answer: A

Per SFAS No. 128, the security is assumed to have been converted at the beginning of the period reported (or at the time of issuance, if later).

User Contributed Comments 3

User Comment
azramirza whats if the converted method?
vatsa Its a method for computing diluted EPS. If a company is having potentially dilutive securities, if-converted method tries to determine EPS if dilutive securities were actually converted in to common stock at the beginning of the year.
khalifa92 the timing of conversion doesn't change dilutive eps
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