Which statement is correct about the "if-converted" method for EPS?
A)This method assumes the interest is paid on the convertible security until it was converted into ordinary shares.
B)This method assumes the interest is paid on the convertible security for one-half of the year.
C)This method assumes the interest is paid on the convertible security for the period after its issue date.
D)This method assumes the no interest is paid on the convertible security for the entire year.

Question

Quizplus · Accepted Answer

The "if-converted" method assumes that convertible securities are converted into ordinary shares at the beginning of the period, so no interest is paid on the convertible security for the entire year.

Which Statement Is Correct About the "If-Converted" Method for EPS