Hihotech Company reported net income of 2.3 million for the year ended 20XX and had a weighted average of 800,000 common shares outstanding. At the beginning of the fiscal year, the company has option of 30,000 with an average exercise price 35. No potentially dilutive securities are outstanding. Over the fiscal year, the company’s market price averaged 55 per share.Required:Calculate company’s basic and diluted EPS under IFRS and US GAAPIt has been argued that both methods will yield the same results but the underlying justification employed by both methods is different. Explain these justifications.

Net Income = 2.3 Million Weighted average common shares outstanding = 800,000 shares The exercise…

Answered: Hihotech Company reported net income of…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

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Problem 12RE: Given the following year-end information, compute Greenwood Corporations basic and diluted earnings...

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Hihotech Company reported net income of 2.3 million for the year ended 20XX and had a weighted average of 800,000 common shares outstanding. At the beginning of the fiscal year, the company has option of 30,000 with an average exercise price 35. No potentially dilutive securities are outstanding. Over the fiscal year, the company’s market price averaged 55 per share.

Required:

Calculate company’s basic and diluted EPS under IFRS and US GAAP
It has been argued that both methods will yield the same results but the underlying justification employed by both methods is different. Explain these justifications.

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