2020 has brought us a global pandemic, an election, and adoption of some major new accounting standards. So what does it all mean for your EPS calculations? In this episode, John Horan, a PwC managing director in our national office, joins host Heather Horn to discuss some important EPS reminders for companies to think about for their year-end reporting. 

Topics include: 

• 0:45 - Basic EPS: 
  • 2:13 - Participating securities—John describes what they are and why you may need to consider them in your EPS calculations.
  • 11:53 - Mezzanine securities—John walks through how having securities classified here impacts  EPS.
• 16:58 - Diluted EPS:
  • 18:45 - Settlements in cash or shares—how it settles makes a difference to EPS - we give examples on each.
  • 23:08 - Liability classified warrants—warrants classified as liabilities can be dilutive to EPS - even in periods of loss.
  • 26:09 - New convertible debt standard—how does the new FASB standard on liabilities and equity change the presumption of share settlement? John brings you the inside scoop.

Want to learn more? See chapter 7 of our Financial statement presentation guide and listen to our podcast on Earnings per share: 5 things to know.

John Horan is a managing director in PwC’s National office where he assists clients with complex accounting issues in the areas of foreign currency, liabilities and equity, earnings per share, and derivatives and hedging. John specializes in large capital transactions and initial public offerings.

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With nearly 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.