Codification Exercises

If your school has a subscription to the FASB Codification, log in and prepare responses to the following. Provide Codification references for your responses.

CE$15\mathrm{.}1$ Access the glossary $($Master Glossary$)$ to answer the following.

What is the definition of $$basic earnings per share$?$

What is $$dilution$?$

What is a $$warrant$?$

What is a $$grant date$?$

CE$15\mathrm{.}2$ For how many periods must a company present EPS data?

CE$15\mathrm{.}3$ For each period that an income statement is presented, what must a company disclose about its EPS?

CE$15\mathrm{.}4$ If a company$$s outstanding shares are increased through a stock dividend or a stock split, how would that alter the presentation of its EPS data?

Codification Research Case

Richardson Company is contemplating the establishment of a share$-$based compensation plan to provide long$-$run incentives for its top management. However, members of the compensation committee of the board of directors have voiced some concerns about adopting these plans, based on news accounts related to a recent accounting standard in this area. They would like you to conduct some research on this recent standard so they can be better informed about the accounting for these plans.

Instructions

If your school has a subscription to the FASB Codification, log in and prepare responses to the following. Provide Codification references for your responses.

Identify the authoritative literature that addresses the accounting for share$-$based payment compensation plans.

Briefly discuss the objectives for the accounting for stock compensation. What is the role of fair value measurement?

The Richardson Company board is also considering an employee share$-$purchase plan, but the Board does not want to record expense related to the plan. What criteria must be met to avoid recording expense on an employee stock$-$purchase plan?

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