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ABC Ltd. has issued staff share options in 20X1 that can be exercised after 3 years' service. For DILUTED EPS, these are treated as outstanding from:
ANot included until performance conditions are met
BThe vesting date (after 3 years)
CThe exercise date
DThe grant date (20X1) — fixed-term staff options are treated as outstanding from grant date for diluted EPS even though vesting depends on continued service
Answer & Solution
Correct answer: D. The grant date (20X1) — fixed-term staff options are treated as outstanding from grant date for diluted EPS even though vesting depends on continued service
Employee share options with FIXED or determinable terms (just continued service) are treated as outstanding from grant date for diluted EPS purposes. Performance-based options would instead be contingently issuable.
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