Question
The following balances were taken from the records of Halcyon Digital for the year ended December 31, 2025. Account Amount Sales Revenue $2,236,000 Sales Returns and Allowances 36,000 Cost of Goods Sold 1,280,000 Selling Expenses 296,000 Administrati
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
IAS 33 — diluted earnings per share
Diluted EPS asks what basic EPS would have been had all dilutive potential ordinary shares converted. Adjust the numerator for anything that would no longer be charged after conversion, adjust the denominator for the extra shares, and include an instrument only if it actually reduces EPS.
Common mistakes
- Including an antidilutive instrument — one that would raise EPS must be excluded.
- Adding the shares from convertible debt without adding back the after-tax interest saved.
- Applying the full share count for instruments issued part-way through the period instead of time-weighting them.