Question

Accounting standards codification database research assignment

to access the fasb accounting standards codification
go to the course canvas under modules for the link to the fasb website, user name, and password.

research component of simulations
all simulations on the uniform cpa exam will include a research component. research components of simulations require students to search the professional literature and export results. you will use the accounting standards codification (asc) to complete the research component of the simulation. interpretation of your research results is not a component of uniform cpa exam simulations.

requirements for this assignment
using the codification database, research the issues below. your research should consist only of the appropriate reference to the authoritative literature without paraphrasing or commentary. you must supply the complete citation number (topic, subtopic, section, and paragraph). note that there may be multiple correct answers. all boxes must be complete for full credit.

provide the general description of how diluted earnings per share is calculated.

Answer 1

Diluted EPS is calculated by adjusting both the income and the weighted average number of shares outstanding for the effect of dilutive potential common shares. The authoritative guidance for calculating diluted earnings per share is found in the FASB Accounting Standards Codification under Topic 260.

Step-by-step explanation:

To calculate diluted earnings per share (EPS), Accounting Standards Codification (ASC) provides guidance under Topic 260, specifically the Earnings Per Share Subtopic.

According to ASC, diluted EPS is calculated by adjusting the income available to common shareholders and the weighted average number of shares outstanding, for the effects of all potential dilutive common shares that could be converted into common stock during the reporting period.

Potential common shares are included in the diluted EPS calculation when their effect is dilutive, meaning they would reduce EPS if converted.

To find the exact references in the ASC, one would search the database using the provided instructions and login details. The authoritative guidance is located in the ASC under Topic 260, which deals with Earnings Per Share.