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Hi,
I just read Example 5 in Chapter 21 Earnings per share and its answer.There was 900000 usd from discontinued opperations.
Would you pls explain why this amount was deducted from the earnings when calculating the dilutive EPS, and was NOT deducted to calculate the Basic EPS.I thought that discontinued operations are deducted from earnings always when we deal with EPS.
The deduction from earnings when calculating dilutive eps is because dilutive eps calculation is to see what will be the situation in the future and discontinued operations will not contribute to earnings in the future
We don’t deduct it from earnings for the eps calculation because it DID contribute to earnings this year (the figure that we use as the numerator in the eps calculation)
Does that explain it ok for you?
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