Which statement is incorrect? a. Shares, issued in exchange for the settlement of a liability, are included in EPS calculation from the settlement date. b. Shares, that will be issued upon the conversion of a mandatorily convertible instrument, are included in the calculation of basic EPS from the date the contract is entered into. c. Contingently-issuable shares are treated as outstanding, and are included in the calculation of basic EPS from the date when all necessary conditions are satisfied. d. none of the above

Which statement is incorrect? a. Shares, issued in exchange for the settlement of a liability, are included in EPS calculation from the settlement date. b. Shares, that will be issued upon the conversion of a mandatorily convertible instrument, are included in the calculation of basic EPS from the date the contract is entered into. c. Contingently-issuable shares are treated as outstanding, and are included in the calculation of basic EPS from the date when all necessary conditions are satisfied. d. none of the above

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 8QE

See similar textbooks

Related questions

Q: Financial assets

A: In accordance with PFRS 9, an entity may reclassify Correct Answer:- b. Financial assets designated…

Q: Which of the following statements is not true of the fair-value method of accounting for marketable…

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,…

Q: PRO Which of the 1. Financial assets in the form of investments in subsidiaries, associates and…

A: PAS 32 covers Contracts for delivery or receipt of commodity and other non financial assets that can…

Q: 37. When an entity reduces its interest in an investment in equity securities accounted for by the…

A: Introduction: If an investor company invests and acquires between 20 to 50% stake in the investee…

Q: of the following would be classified as non-current liability? * a. Unearned revenue b. Mandatory…

A: Solution: Non current liabilities are those liabilities are not due to be paid in next one year.…

Q: is a correct statement below? A. Equity is the residual interest in the liabilities of the entity…

A: Option A is incorrect The correct statement is Equity is the residual interest in the assets of the…

Q: All of the following are true of the effect of fair value accounting on the financial statements…

A: Fair value accounting: uses the Current Market Values as the basis for Recognizing Assets &…

Q: elated to a change in market conditions B. It can be changed to reflect the rise or fall in the…

A: International Accounting Standards Board defines the cash value to be an amount that an account will…

Q: 1. EPS disclosures are a. Encouraged for all entities b. Required for all entities C. Encouraged for…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: Unrealized holding gains and losses are included in net income for securities that are…

A: Unrealized holding gains and losses refer to changes in the fair value of securities that are held…

Q: When share options issued to employees are vested prior to the predetermined vesting date, the…

A: According to the accounting standard if options are vested before the date then company wil…

Q: Marketable securities are accounted for at their current fair value using mark-to-market accounting.…

A: Mark-to-Market accounting is an accounting practice that helps to adjust the value of an asset on…

Q: Under the fair value through other comprehensive income (FV-OCI) model, holding gains and losses are…

A: 1. Fair Value Through Other Comprehensive Income (FV-OCI) Model:Correct Answer: a. recognized in…

Q: Under PFRS9, reclassification of investment in equity securities: A. Is allowed as long as it is…

A: Introduction:- This question is related to the accounting treatment of investments in equity…

Q: If the equity-settled transaction (share option) is granted early during the vesting period, the…

A: If stock option is granted early during the vesting period, then the compensation that would have…

Q: 5. Which of the following is incorrect regarding inclusion or shares in the weighted average number…

A: We shall answer the first question since the exact question wasn't specified. Please resubmit a new…

Q: f the employee has the choice as to whether the settlement is in cash or by issuance of equity…

A: A Compound Financial Instrument is an instrument that has the characteristic of both an equity and…

Q: In an equity swap where a liability is settled through the issuance of equity securities A.no gain…

A: According to IFRS the financial liability is renegotiated and the equity is issued to a creditor in…

Q: Merchandise sold by Lang Company to its customers last year amounted to $13,720,000; sales returns…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: For cash-settled share based payment transactions, until the liability is settled, the entity is…

A: Solution: As per IFRS 2, "For cash-settled share-based payment transactions, entity should measure…

Q: The equity component of a compound financial instrument is determined A. by allocating the issue…

A: Equity is the component of the shareholders' equity that includes only the portion of ownership in…

Q: Subscription receivable and other receivables from sale of shares which are collectible currently…

A: Given statement Subscription receivable and other receivables from sale of shares which are…

Q: A contract that will be settled in the entity’s own equity instruments and under which the entity is…

A: Financial liability of the company is what company is contractual obliged to deliver cash or…

Q: Changes in the fair value of held to maturity securities are: A. not recognized. B. recognized on…

A: The question is multiple choice question. Required Choose the Correct Option.

Question

Which statement is incorrect?

a. Shares, issued in exchange for the settlement of a liability, are included in EPS calculation from the settlement date.

b. Shares, that will be issued upon the conversion of a mandatorily convertible instrument, are included in the calculation of basic EPS from the date the contract is entered into.

c. Contingently-issuable shares are treated as outstanding, and are included in the calculation of basic EPS from the date when all necessary conditions are satisfied.

d. none of the above

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction:

VIEW

Step 2 Answer and Explanation:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which statement is incorrect? * Shares, issued in exchange for the settlement of a liability, are included in EPS calculation from the settlement date. Shares, that will be issued upon the conversion of a mandatorily convertible instrument, are included in the calculation of basic EPS from the date the contract is entered into. Contingently-issuable shares are treated as outstanding, and are included in the calculation of basic EPS from the date when all necessary conditions are satisfied. none of the above
For cash-settled share based payment transactions, until the liability is settled, the entity is required to re-measure the fair value of the liability at each reporting date and at the date of settlement and any changes in fair values are: a. Not recognized b. Included in earnings c. Included in accumulated profits d. Treated as a component of equity
Under IFRS 2, Share-Based Payment, the value of the options that lapse after vesting shall be credited to income during the period that the options lapse remain in equity. be converted into a liability. be credited to expense during the period the options lapse.
The equity component of a compound financial instrument is determined O A. by allocating the issue price to the liability and equity components based on their relative fair values. B. by allocating the equity component its fair value, O c. by deducting the fair value of the liability component without the equity feature from the net proceeds from the issuance of the compound instrument D. by multiplying the no. of shares at its FMV O E. By multiplying the no. of shares at its par value
When holding held-to-maturity securities, a company should disclose at each balance sheet date the aggregate fair value of the securities. the gross unrecognized holding gains and losses. the amortized cost of the securities. all of these choices. 2. When holding available-for-sale securities, a company should disclose for each income statement period gross realized gains and losses as a separate component of other comprehensive income. unrealized gains and losses included in net income. proceeds from sales and the gross realized gains and losses on those sales. none of these choices.
S1: Shares issued to settle a liability are included in the EPS calculation fromthe settlement date. S2: Shares to be issued upon the conversion of amandatorily convertible instrument are include in the calculation of basicEPS from the date of conversion for the shares A. both are trueB. both are falseC. S1 is trueD. S2 is true
In an equity swap where a liability is settled through the issuance of equity securities A.no gain or loss is recognized B.gains are recognized as Share Premium, losses are expensed. C.gain or loss is recognized as the difference between the measurement amount of the equity securities issued and the carrying amount of the liability derecognized D.any apparent gain or loss is recognized in equity as an addition to share premium
2. Under IFRS 2, Share-Based Payment, the value of the options that lapse after vesting shall A. be credited to expense during the period the options lapse. B. be credited to income during the period that the options lapse C. remain in equity. D. be converted into a liability.
Statement 1: Shares issued to settle a liability are included in the earnings per share (EPS) calculation from the settlement date. Statement 2: Shares to be issued upon the conversion of a mandatorily convertible instrument are include in the calculation of basic earnings per share (EPS) from the date of conversion for the shares.A. both are trueB. both are falseC. S1 is trueD. S2 is true
1. Trade payables and other liabilities that are part of an entity'sworking capital may be presented as current liabilities even ifthey are expected to be settled beyond one year.2. According to PAS 1, a currently maturing debt that the entity'smanagement intends to refinance is presented as noncurrent.3. According to PFRS 15, if an entity expects that a portion of giftcertificates sold will not be redeemed, the entity recognizes theexpected breakage amount as revenue in proportion to the pattern of rights exercised by customers.4. Unearned revenue is revenue that is earned but not yet collected
1. Under IFRS 2 Share-Based Payment, what is the basis for measurement of share options? A. Fair value at the date of grant. B. Fair value at each reporting date. C. Expected fair value at the date pf exercise. D. Intrinsic value at each reporting date. 2. Under IFRS 2, Share-Based Payment, the value of the options that lapse after vesting shall A. be credited to expense during the period the options lapse. B. be credited to income during the period that the options lapse C. remain in equity. D. be converted into a liability. 3. When should the compensation expense be recorded as a result of share options granted by the enterprise to its employees?A. During the year of grant B. During the year that the options ultimately vest C. During the years when services are required to be rendered by the employees D. During the year when the option first becomes exercisable
According to IFRS, once the total compensation is measured at the date of grant A. It can be changed in future periods related to a change in market conditions B. It can be changed to reflect the rise or fall in the market price of the company's ordinary shares C. A company is permitted to adjust tge number of share options expected to the actual number of instruments vested D. All of the choices are correct