When a company with a complex capital structure has a loss from continuing operations and potentially dilutive securities,the calculation of earning per share (EPS)results in
A) simple EPS (no potentially dilutive securities are included in the calculation).
B) no EPS being reported.
C) EPS being reported,using the same calculation of dilutive EPS as would be used if net income were positive.
D) EPS being reported,using securities in the calculation of dilutive EPS that would be anti-dilutive if income were positive.

Question

Quizplus · Accepted Answer

When a company has a loss from continuing operations, potentially dilutive securities are not included in the calculation of EPS, resulting in the reporting of simple EPS. This is because including potentially dilutive securities would not be meaningful in the context of a loss, as it would not affect the loss per share in a way that is relevant to investors.

When a Company with a Complex Capital Structure Has a Loss