When the acquisition of a subsidiary occurs during a reporting period, the computation of both Basic earnings per share (BEPS) and Diluted earnings per share (DEPS) includes subsidiary income

Question

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When a subsidiary is acquired during a reporting period, both BEPS and DEPS should include subsidiary income for the partial period only and the number of subsidiary shares should be weighted for the partial period. This is because the subsidiary was not part of the parent company for the entire reporting period.

When the Acquisition of a Subsidiary Occurs During a Reporting