Consolidated earnings per share: Consolidated earnings per share can be calculated in a similar manner as earnings per share is calculated in a single corporation. Consolidated earnings per share are calculated using income accredited to the controlling interest and available to parent’s common stock. Basic consolidated EPS is calculated by deducting income to the non-controlling interest and preferred dividends of the parent company if any from consolidated net income, divided by the weighted-average number of the parent’s common shares outstanding during the period. An important point to be considered here is, in the calculation of the parent’s percentage of ownership changes frequently when subsidiary convertible bonds and preferred stock are treated as common stock and subsidiary options and warrants are assumed as had been exercised. In addition, income available to subsidiary common shareholders also changes. The factors that may cause a subsidiary’s income contribution to consolidated EPS to be different from contribution to consolidated net income

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Chapter 10, Problem 10.19Q

To determine

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Consolidated earnings per share: Consolidated earnings per share can be calculated in a similar manner as earnings per share is calculated in a single corporation. Consolidated earnings per share are calculated using income accredited to the controlling interest and available to parent’s common stock. Basic consolidated EPS is calculated by deducting income to the non-controlling interest and preferred dividends of the parent company if any from consolidated net income, divided by the weighted-average number of the parent’s common shares outstanding during the period. An important point to be considered here is, in the calculation of the parent’s percentage of ownership changes frequently when subsidiary convertible bonds and preferred stock are treated as common stock and subsidiary options and warrants are assumed as had been exercised. In addition, income available to subsidiary common shareholders also changes.

The factors that may cause a subsidiary’s income contribution to consolidated EPS to be different from contribution to consolidated net income

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