An Option-Theoretic Argument Favoring EPS Dilution Over Holding Gain/Loss.

Joseph K. Cheung

doi:10.2308/ah-9604083359

June 1, 1992Accounting Horizons

An Option-Theoretic Argument Favoring EPS Dilution Over Holding Gain/Loss.

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Key Points

This analysis critiques the treatment of option-like securities in EPS calculations, advocating for dilution over holding gain/loss.
Commentary on existing literature regarding accounting for option-like securities.
Discussion highlights shortcomings of the holding gain/loss approach.
Focus on equity characteristics of option-like securities.
EPS dilution is favored for a more accurate representation of financial performance.
The holding gain/loss approach is deemed inadequate for option-like securities.
The analysis underscores the importance of proper EPS calculations in accounting.

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Implication

Opinion discusses EPS dilution approach over holding gain/loss for option-like securities, suggesting advantages.

Abstract

Opinion. Comments on Donald E. Wiseman's December 1990 `Accounting Horizons' journal article regarding the treatment of option-like securities in EPS calculations. EPS dilution; Equity characteristics of certain option-like securities; Shortcoming of the holding gain/loss approach.

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Joseph K. Cheung (1992) studied this question.

synapsesocial.com/papers/6a2f98a0a1cfeec490829b0d https://doi.org/10.2308/ah-9604083359

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An Option-Theoretic Argument Favoring EPS Dilution Over Holding Gain/Loss.

Key Points

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Implication

Abstract

Discussion

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An Option-Theoretic Argument Favoring EPS Dilution Over Holding Gain/Loss.

Key Points

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Implication

Abstract

Discussion

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