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In the note Example 5,
I would like to know why in the working calculating diluted eps, it uses earning as $9100,000 which profit from discontinued operations has been ignored however in the final ans the earning used to calculated the diluted eps is $10,000,000.
Why it is not consistently using $10,000,000 to calculate the diluted eps.
Thanks!
In the future those $900,000 equivalent will not contribute to profits because the operation has been discontinued
So there’s no point bringing it in when calculating potential earnings per share in the future
However, once we’ve decided which are and which are not diluting, we now DO include that $900,000 because it WAS a part of this year’s figures and we’re trying to show what the effect would have been on THIS YEAR’S earnings per share if those dilutions could have been activated
OK?
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