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Tags
#cfa-level-1 #fra-introduction #income-statement
Question

For the calculation of diluted EPS using the treasury method, the assumed exercise of these financial instruments would have the following effects:

  • The company is assumed to receive [...] and, in exchange, [...]

Answer
cash upon exercise

to issue shares.

Tags
#cfa-level-1 #fra-introduction #income-statement
Question

For the calculation of diluted EPS using the treasury method, the assumed exercise of these financial instruments would have the following effects:

  • The company is assumed to receive [...] and, in exchange, [...]

Answer
?

Tags
#cfa-level-1 #fra-introduction #income-statement
Question

For the calculation of diluted EPS using the treasury method, the assumed exercise of these financial instruments would have the following effects:

  • The company is assumed to receive [...] and, in exchange, [...]

Answer
cash upon exercise

to issue shares.
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6.3.3. Diluted EPS When a Company Has Stock Options, Warrants, or Their Equivalents Outstanding
ld have been purchased with the proceeds. This method is called the treasury stock method under US GAAP because companies typically hold repurchased shares as treasury stock. The same method is used under IFRS but is not named. <span>For the calculation of diluted EPS using this method, the assumed exercise of these financial instruments would have the following effects: The company is assumed to receive cash upon exercise and, in exchange, to issue shares. The company is assumed to use the cash proceeds to repurchase shares at the weighted average market price during the period. As a result of these two effects, the number of shares outstanding would increase by the incremental number of shares issued (the difference between the number of s

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