When using the if-converted method to compute diluted earnings per share,convertible securities should be
A) included only if antidilutive.
B) included only if dilutive.
C) included whether dilutive or not.
D) not included.

Question

Quizplus · Accepted Answer

When using the if-converted method, convertible securities are included only if they are dilutive. This means that their conversion into common shares would result in a reduction in earnings per share. Convertible securities that are antidilutive should not be included in the diluted earnings per share calculation.

When Using the If-Converted Method to Compute Diluted Earnings Per