Current GAAP requires that all convertible bonds be considered as if converted and included in the denominator of diluted earnings per share.

Question

Quizplus · Accepted Answer

Under current GAAP, convertible bonds are included in the calculation of diluted earnings per share only if their conversion would result in a dilution of earnings per share. The "if-converted" method is used, but it's not applied universally; it depends on whether the conversion would actually dilute EPS.

Current GAAP Requires That All Convertible Bonds Be Considered as If