Chapter 19 Flashcards
Share based compensation
Forms of payment is dependent on companies stock. Stock awards/options/appreciation rights
Accounting objective of Sharebased compennsation
find the fair value of compensation, and expense that compensation over a period of time that the service is performed
Restricted Stock Awards
Shares are awarded to the name of the employee (physical possession might be retained by the company)
Restricted Stock Units
Is a right to recieve a specific number of shares of company stock. Distributed after vesting requirement
RSU calc
Years to distributed
Stock option plans
Number of shares at a specified price during a specified period
Intrinsic Value
Market price - option price which can be aqcuired
Option Pricing Model
Used to calculate the option’s fair value
Employee share purchase plans
Permit all employees to buy shares directly from their company at favorable terms
Comparability of EPS
maixmized by minimizing the inconsistencies in their calculation from one company to the next
EPS
Earnings/weighted average number of common shares outstanding
Stock Dividend
Distribution of additional shares to existing shareholders
Stock split
increases number of shares without effecting amount of total shares
Reacquired shares
weighted number of shares are reduced.
Preferred Dividends
Subtracted from NI
Complex Capital structure
when any potential common shares are outstanding
Basic EPS
Dilutes EPS
Minimum base EPS for reporting
> =2
Convertible securities
Denominator of EPS is increased by number of shares and Numerator is increased by interest
Antidilutive
Incremental effect > Dilluted amount
