Under current GAAP, a company with a complex capital structure and potential earnings per share dilution must present
A) primary and fully diluted earnings per share.
B) basic and diluted earnings per share.
C) basic and primary earnings per share.
D) basic earnings per share and cash flow per share.

Question

Quizplus · Accepted Answer

Under current GAAP, a company with a complex capital structure and potential earnings per share dilution must present basic and diluted earnings per share. Basic earnings per share is calculated by dividing the net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution of other securities, such as convertible bonds or stock options. Therefore, presenting both basic and diluted earnings per share gives a more comprehensive picture of a company's financial performance.

Under Current GAAP, a Company with a Complex Capital Structure