Question 4.19: Diluted EPS for Options under IFRS Assuming the same facts a...
Diluted EPS for Options under IFRS
Assuming the same facts as in Example 4-18, calculate the weighted average number of shares outstanding for diluted EPS under IFRS.
If the options had been converted, the company would have received
$1,050,000. If this amount had been received from the issuance of new shares at the average market price of $55 per share, the company would have sold 19,091 shares. The excess of the shares issued under options (30,000) over the shares the company could have sold at market prices (19,091) is 10,909. This amount is added to the weighted average number of shares outstanding of 800,000 to get diluted shares of 810,909. Note that this is the same result as that obtained under U.S. GAAP; it is just
derived in a different manner.