A.2 Numerator (Earnings)

Accounting differences between U.S. GAAP and IFRS Accounting Standards affect the amount of reported earnings (numerator) and, consequently, result in EPS differences even if the method used to calculate EPS is the same. For example, the if-converted method is applied to convertible securities for EPS purposes under both U.S. GAAP and IFRS Accounting Standards, yet the accounting (e.g., the initial and subsequent measurement) for convertible securities often differs. Under both sets of standards, a calculation may have the same denominator (in the absence of other denominator differences), but the numerator may differ. This is because of the numerous accounting differences between U.S. GAAP and IFRS Accounting Standards that have an effect on reported net earnings.