Comparison between U.S. GAAP and International ... - Grant Thornton

Comparison between U.S. GAAP and International Financial Reporting Standards 142
IFRS
The number of ordinary shares contingently issuable may
depend on the future market price of the ordinary shares.
If the effect is dilutive, the calculation of diluted EPS is
based on the number of ordinary shares that would be
issued if the market price at the end of the reporting
period were the market price at the end of the contingency
period (i.e. the contingencies must be satisfied at the end
of the reporting period) (IAS 33.54).
U.S. GAAP
any, that would be issuable if the end of the
reporting period were the end of the contingency
period (for example, the number of shares that
would be issuable based on current period
earnings or period-end market price) and the result
would be dilutive. Those contingently issuable
shares shall be included in the denominator of
diluted EPS as of the beginning of the period (or as
of the date of the contingent stock agreement, if
later).
However unlike IFRS, for year-to-date
computations, contingent shares are included on a
weighted-average basis. That is, contingent shares
shall be weighted for the interim periods in which
they were included in the computation of diluted
EPS.
The number of shares contingently issuable may
depend on the market price of the stock at a future
date. If the effect is dilutive, the computation of diluted
EPS reflects the number of shares that would be issued
based on the current market price at the end of the
period being reported on (ASC 260-10-45-52).
Contracts that may be settled in cash or ordinary shares
When an entity has issued a contract that may be settled
in cash or ordinary shares at the entity's option, the entity
always presumes that the contract will be settled in
ordinary shares and includes the resulting potential
ordinary shares in diluted EPS if the effect is dilutive
(IAS 33.58).
For contracts that may be settled in cash or ordinary
shares at the holders' option, the more dilutive of cash
settlement and share settlement shall be used in
calculating diluted EPS (IAS 33.60).
Unlike IFRS, under U.S. GAAP, the inclusion of the
shares is based on a rebuttable presumption that the
contracts will be settled in shares (if more dilutive).
However, the presumption that the contract will be
settled in common stock may be overcome if past
experience or a stated policy provides a reasonable
basis to believe that the contract will be paid partially or
wholly in cash (ASC 260-10-45-45 through 45-47).
Presentation
An entity shall present in the statement of comprehensive
income basic and diluted earnings per share for profit or
loss from continuing operations attributable to the ordinary
equity holders of the parent entity and for profit or loss
attributable to the ordinary equity holders of the parent
entity for the period for each class of ordinary shares that
has a different right to share in profit for the period. An
entity shall present basic and diluted EPS with equal
prominence for all periods presented
(IAS 33.9, .30, and .66).
Similar to IFRS. However, entities that report an
extraordinary item or the cumulative effect of an
accounting change are required to present basic and
diluted per-share amounts for those line items either on
the face of the income statement or in the notes to the
financial statements (ASC 260-10-45-2 through 45-8).
An entity that reports a discontinued operation in
accordance with IFRS 5 shall disclose the basic and
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