EBK INTERMEDIATE ACCOUNTING: REPORTING
2nd Edition
ISBN: 9781337268998
Author: PAGACH
Publisher: YUZU
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Question
Chapter 16, Problem 21GI
To determine
Compare the effect of IFRS with U.S GAAP financial statements and also specify whether EPS is higher or lower under the IFRS.
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Assume that a U.S.-based company has Common Stock, Preferred Stock, Cash, and Debt in its capital structure. It also has on-Balance Sheet Operating Lease Assets and Liabilities.You calculate Current Enterprise Value (TEV) the traditional way, i.e., by starting with Current Equity Value (Eq Val), subtracting Cash, and adding Debt and Preferred Stock.Which of the following valuation multiples is either INVALID or VALID BUT NOT RECOMMENDED for this company?
a. (TEV + Operating Lease Liabilities) / EBITDARb. Eq Val / Net Income to Common c. (Eq Val + Preferred Stock) / Net Incomed. TEV / EBITe. Eq Val / Free Cash Flowf. TEV / Unlevered Free Cash Flowg. Eq Val / Common Shareholders’ Equity
Please describe the reporting of preferred stock consistent with the U.S. GAAP
- Please describe the reporting of preferred stock consistent with IFRS
Please describe the potential effect of the differences between U.S. GAAP and IFRS
with respect to reporting of Preferred Stock on at least one commonly usef financial
statement ratio.
Where can authoritative IFRS be found related to dilutive securities, stock-based compensation, and earnings per share?
Chapter 16 Solutions
EBK INTERMEDIATE ACCOUNTING: REPORTING
Ch. 16 - What are the four important dates in regard to a...Ch. 16 - How does the ex-dividend date differ from the date...Ch. 16 - Prob. 3GICh. 16 - Prob. 4GICh. 16 - Prob. 5GICh. 16 - Prob. 6GICh. 16 - How does the accounting for a liquidating dividend...Ch. 16 - Prob. 8GICh. 16 - Prob. 9GICh. 16 - Prob. 10GI
Ch. 16 - What items might a corporation include in the...Ch. 16 - Prob. 12GICh. 16 - Prob. 13GICh. 16 - Prob. 14GICh. 16 - Prob. 15GICh. 16 - On what date are stock dividends and splits...Ch. 16 - Prob. 17GICh. 16 - What two earnings per share figures generally are...Ch. 16 - Prob. 19GICh. 16 - Prob. 20GICh. 16 - Prob. 21GICh. 16 - A company with potentially dilutive share options...Ch. 16 - Prob. 23GICh. 16 - Prob. 1MCCh. 16 - A prior period adjustment should be reflected, net...Ch. 16 - Prob. 3MCCh. 16 - Effective May 1, the shareholders of Baltimore...Ch. 16 - Prob. 5MCCh. 16 - For purposes of computing the weighted average...Ch. 16 - In determining basic earnings per share, dividends...Ch. 16 - Prob. 8MCCh. 16 - Prob. 9MCCh. 16 - Prob. 10MCCh. 16 - Prob. 1RECh. 16 - Prob. 2RECh. 16 - Prob. 3RECh. 16 - Use the same facts as in RE 16-3, but instead...Ch. 16 - Given the following current year information,...Ch. 16 - In Year 2, Adams Corporation discovered that it...Ch. 16 - Howard Corporal ion had 10,000 shares of common...Ch. 16 - Given the following year-end information for...Ch. 16 - Aiken Corporation has compensatory share options...Ch. 16 - Marlboro Corporation has 9% convertible preferred...Ch. 16 - Sarasota Corporation has 9% convertible bonds...Ch. 16 - Given the following year-end information, compute...Ch. 16 - Prob. 1ECh. 16 - Dividends Andrews Company has 80,000 available to...Ch. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Stock Dividend Comparison Although Oriole Company...Ch. 16 - Prob. 6ECh. 16 - Prob. 7ECh. 16 - Prob. 8ECh. 16 - Prob. 9ECh. 16 - Prob. 10ECh. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Weighted Average Shares At the beginning of the...Ch. 16 - Prob. 14ECh. 16 - Prob. 15ECh. 16 - Prob. 16ECh. 16 - Prob. 17ECh. 16 - Prob. 18ECh. 16 - Prob. 19ECh. 16 - Prob. 20ECh. 16 - Prob. 21ECh. 16 - Francis Company has 24,000 shares of common stock...Ch. 16 - Prob. 23ECh. 16 - Prob. 24ECh. 16 - Prob. 25ECh. 16 - Prob. 26ECh. 16 - Prob. 27ECh. 16 - Prob. 28ECh. 16 - Keener Company has had 1,000 shares of 7%, 100 par...Ch. 16 - Prob. 2PCh. 16 - Prob. 3PCh. 16 - Prob. 4PCh. 16 - Prob. 5PCh. 16 - Prob. 6PCh. 16 - Prob. 7PCh. 16 - Prob. 8PCh. 16 - Prob. 9PCh. 16 - Prob. 10PCh. 16 - Prob. 11PCh. 16 - Prob. 12PCh. 16 - Prob. 13PCh. 16 - Prob. 14PCh. 16 - Prob. 15PCh. 16 - Prob. 16PCh. 16 - Prob. 17PCh. 16 - Prob. 18PCh. 16 - Prob. 19PCh. 16 - Prob. 20PCh. 16 - Prob. 21PCh. 16 - Prob. 22PCh. 16 - Prob. 23PCh. 16 - Frost Company has accumulated the following...Ch. 16 - Prob. 25PCh. 16 - Prob. 26PCh. 16 - Problems may be encountered in accounting for...Ch. 16 - Stock splits and stock dividends may be used by a...Ch. 16 - Earnings per share (EPS) is the most featured...Ch. 16 - The earnings per share data required of a company...Ch. 16 - Prob. 5CCh. 16 - Public enterprises are required to present...Ch. 16 - Prob. 7CCh. 16 - Ryan Company has as a goal that its earnings per...
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Similar questions
- If an entity has issued cumulative redeemable preference shares to the market, discuss what effects this will have on the liabilities that the company will report in their financial statements.arrow_forwardBriefly describe some of the similarities and differences between GAAP and IFRS with respect to the accounting for dilutive securities, stock-based compensation, and earnings per share.arrow_forwardWhat are the computational guidelines for determiningwhether a convertible security is to be reported as part ofdiluted earnings per share?arrow_forward
- Which of the following is the second priority in the valuation of shares issued for services received? Par Value of shares FV of services Billings on services FV of sharesarrow_forward"The P/E ratio of company A is lower company B andCompany C and more akin to to company D,suggesting a comparable valuation with D. It appearsthat Company A's P/S ratio is higher than that ofCompanies B and D. Company A's P/B ratio is higherthan all of its competitors" Basedthese information,What thats indicate when I do a stock valuation forcompany A?arrow_forwardhow does asx impacts liquidity of new zealand equity market?arrow_forward
- For publicly traded firms, which of these ratios measure what investors think of the company's future performance and risk? Multiple Choice liquidity ratios market value ratios price value ratios profitability ratiosarrow_forwardCalculation of which if the following metrics require knowledge of the company’s share price? Choose two A) return on equity B) dividend yield C) dividend payout ratio D) ratio of market-to-book value E) leverage ratioarrow_forward“The market capitalisation of a brand as reflected by their share price on the stock exchange isoften far higher than the actual asset value of the company.” Question) Evaluate this statement in relation to the difficulties encountered in valuing acompany when trying to sell it.arrow_forward
- Which of the following statements is CORRECT? Group of answer choices The component cost of preferred stock is expressed as rp(1 - T). This follows because preferred stock dividends are treated as fixed charges, and as such they can be deducted by the issuer for tax purposes. A cost should be assigned to retained earnings due to the opportunity cost principle, which refers to the fact that the firm’s stockholders would themselves expect to earn a return on earnings that were paid out rather than retained and reinvested. No cost should be assigned to retained earnings because the firm does not have to pay anything to raise them. They are generated as cash flows by operating assets that were raised in the past, hence they are “free.” Suppose a firm has been losing money and thus is not paying taxes, and this situation is expected to persist into the foreseeable future. In this case, the firm’s before-tax and after-tax costs of debt for purposes of calculating the WACC will both be…arrow_forwardDo the Market-value ratios relate a firm's stock price to its earnings and book value per share? How?arrow_forwardAll of the following are key similarities between GAAP and IFRS with respect to accounting for dilutive securities and EPS except: a. the model for recognizing stock-based compensation. b. the calculation of basic and diluted EPS. c. the accounting for convertible debt. d. the accounting for modifications of share options, when the value increases.arrow_forward
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