A subsidiary has dilutive securities outstanding that include convertible bonds payable.The bonds are convertible into the parent's common stock.When calculating consolidated diluted earnings per share,the convertible bonds will affect

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The convertible bonds payable will affect both the numerator and denominator of consolidated diluted EPS. This is because, upon conversion, the bonds will increase the number of common shares outstanding in the denominator of the EPS calculation, while at the same time adding to the net income available to shareholders in the numerator. Therefore, both the numerator and denominator will be affected.

A Subsidiary Has Dilutive Securities Outstanding That Include Convertible Bonds