2003-7 involved a VPF with standard commercial terms similar to the VPF described above, with one notable exception: the counterparty in the ruling did not have the right to borrow the underlying shares
pledged by the counterparty.
Under the Fifo method, the earliest shares
acquired are deemed to be the first sold.
4) For publicly traded shares
, fair market value may be determined by reference to market prices.
Since fewer shares
are considered outstanding under SOP 93-6 than under the old accounting, earnings per share
may increase or decrease under the new rules, even after accounting for the reduction in net income that stems from adopting the SOP.
The total effect on the income statement of Share
Programme 2008 will differ as a result of the development of the share
price, allocation of rights to investment shares
, matching shares
and performance shares
, size of the social security charges and Carnegie's tax rate, and, above all, the level of participation in the programme.
But there was never a guarantee that a company's shares
would increase just because of an announcement the day before.
The objective of basic EPS is to measure performance for the reporting period by dividing income available to common shareholders by the weighted average number of shares
outstanding (see the flowchart on pages 64-66).
No matching shares
will be distributed if the percentage increase in earnings per share
is less than 2 percent per year or if the total shareholder return to is not better than the comparative index.
If the 1,000 shares
offered as payment are mature ISO shares
and the 5,000 shares
are offered under an ISO plan:
Pursuant to the tender offer, the company will first purchase shares
of preferred stock from all holders of "odd lots" of less than 100 shares
who properly tendered all of their shares
before the expiration date.
Their worst stock was eToys: 333 shares
bought for $68.
Dividends on ESOP shares
are charged to retained earnings.