IFRS and GAAP Are Similar in Regard to Computing Earnings

question 27

Essay

IFRS and GAAP are similar in regard to computing earnings per share components. However, the calculation of the impact from the exercise of options differs.
Required:
a.Describe the difference in treatment of unrecognized compensation cost relating to options in the calculation of EPS.
b.Explain why the IFRS approach will systematically result in lower reported diluted EPS.

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Definitions:

Thyroid

The thyroid is a butterfly-shaped gland located in the neck, below the Adam's apple, producing hormones that regulate the body's metabolic rate, heart and digestive function, muscle control, brain development, and bone maintenance.

Cricoid

A ring-like cartilage located at the top of the trachea and below the thyroid cartilage, forming the back part of the larynx and providing attachment for muscles involved in opening and closing the airway.

Glottis

The opening between the vocal cords in the larynx, crucial for producing vocal sounds.

Positive Message

Communication that conveys favorable, optimistic, or encouraging information or sentiments.