A.7 Denominator for Diluted EPS: Treasury Stock Method — Year-to-Date Calculation
Under U.S. GAAP, the number of incremental shares included in quarterly diluted
EPS is calculated by using the average market prices during the three months in the
reporting period. ASC 260-10-55-3 indicates that “[f]or year-to-date diluted EPS,
the number of incremental shares [is determined by using] a year-to-date weighted
average of the number of incremental shares included in each quarterly diluted EPS
computation.” See Section
4.9.1 for more information.
Under IFRS Accounting Standards, paragraph 37 of IAS 33 states that the number
of incremental shares “shall be determined independently for each period presented.”
This is consistent with paragraph 29 of IAS 34, which states, in part, that “the
frequency of an entity’s reporting shall not affect the measurement of its annual
results.” Thus, in accordance with paragraph 37 of IAS 33, the number of dilutive
potential ordinary shares included in year-to-date calculations of diluted EPS is
the weighted average for the year-to-date period.