diluted share of common stock and generally accepted accounting principles

English translation: diluted earnings per share..GAAP (Generally Accepted Accounting Principles)

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English term or phrase:	diluted share of common stock and generally accepted accounting principles
Selected answer:	diluted earnings per share..GAAP (Generally Accepted Accounting Principles)
Entered by:	airmailrpl

18:22 Aug 2, 2004

English language (monolingual) [PRO]
Bus/Financial - Business/Commerce (general) / Earnings reports

English term or phrase: diluted share of common stock and generally accepted accounting principles

Dear Proz,

I have encountered a small problem in a financial translation into Spanish. I don't fully understand the English concept and I'm sure doing so would help shed some light on the translation issue...

In the current document, my client speaks of "net income... per diluted share of common stock".

This same customer, when issuing their 2nd quarter results last year, spoke of a "GAAP net loss...per share" (full stop, no mention of diluted or common stock).

Regardless of whether the income or loss, the question I would like clarified is whether this "diluted share of common stock" might be one of those "Generally accepted accounting principles (GAAP)", or whether these are two totally unrelated concepts.

Thanks very much in advance.

Sonrisas,

Álvaro :O)

moken KudoZ activity Questions: 167 (5 open) Answers: 4460
Local time: 18:57

explanation

Explanation:
diluted share
see diluted earnings per share.

diluted earnings per share
Earnings per share, including common stock, preferred stock, unexercised stock options, unexercised warrants, and some convertible debt. In companies with a large amount of convertibles, warrants and stock options, diluted earnings per share are usually a more accurate measure of the company's real earning power than earnings per share.
http://www.advfn.com/money-words_term_1436_diluted_earnings_...

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Note added at 8 mins (2004-08-02 18:31:51 GMT)
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SafeNet News
... a GAAP (Generally Accepted Accounting Principles) basis for the quarter ended December 31, 2003, was $4.0 million, or $0.28 per diluted share, which compares ...
www2.safenet-inc.com/news/viewstory.asp?ID=289

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Note added at 11 hrs 2 mins (2004-08-03 05:25:43 GMT)
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Generally Accepted Accounting Principles
in the United States

\"U.S. GAAP \" Web Site
A comprehensive source of U.S. GAAP information
http://cpaclass.com/gaap/gaap-us-01a.htm

------------------

Anatomy of an annual report

While most annual reports contain optional elements, all reports contain information the SEC requires.
Optional elements include:

Financial highlights
Letter to stockholders
Corporate message
Report of management
Board of directors and management
Stockholder information

SEC-required elements include:
Report of management
Auditor\'s report
Management discussion
Financial statements and notes
Selected financial data
http://www.ibm.com/investor/financialguide/gs/gs3b.phtml

Selected response from:

airmailrpl
Brazil
Local time: 14:57

Grading comment

Thanks to you all - finally this answer had the key to the door that needed opening. I somehow feel that maybe my question was a bit vague - my apologies, I'll try better next time!

Take care,

Álvaro :O) :O)
4 KudoZ points were awarded for this answer

SUMMARY OF ALL EXPLANATIONS PROVIDED

5 +2

diluted share of common stock

Jane Lamb-Ruiz (X)

4 +1

this is a result of stock splits

David Knowles

explanation

airmailrpl

Discussion entries: 1

Answers

4 mins confidence:

peer agreement (net): +1

this is a result of stock splits

Explanation:
Something has happened to the number of shares in circulation. Probably more have been issued, so the shares are now worth less than they were. They are "diluted" in the jargon. Last year, there probably weren't any changes in the number of shares.

David Knowles
Local time: 18:57
Works in field
Native speaker of:

English
PRO pts in category: 28

20 mins confidence:

peer agreement (net): +2

diluted share of common stock

Explanation:
decrease, loss or weakening of a financial-statement related item. If more common shares are issued, the equity interest [percentage of ownership] each share represents goes down. That's the meaning....

Example: there are 1,000 shares
Each is worth 100 dollars
TOTAL EQUITY= 100 x 1,000 or ONE MILLION DOLLARS
You own 50 shares. They are worth 500,000 at 100 dollars per share.
If they issue 100 more, 200 x 1,000 = two million dollars
You still own 50 shares, now worth 250,000. That is one example of dilution.

GAAP--every time you see this it means, ''as defined by GAAP" OR
as set forth under GAAP...the standards....

HTH

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Note added at 21 mins (2004-08-02 18:44:21 GMT)
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In your example, the dilution is as PER DEFINED under GAAP.

Jane Lamb-Ruiz (X)
Specializes in field
Native speaker of:

English,

Portuguese

7 mins confidence:

explanation

airmailrpl
Brazil
Local time: 14:57
Works in field
Native speaker of:

English,

Portuguese
PRO pts in category: 33

Grading comment

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