A method used to assess the dilution of convertible securities if converted into new shares when the stock price is above the exercise price. This method assumes convertible securities are converted either at the issuance date or the beginning of the year. The number of new shares is calculated based on the conversion ratio of the convertible security. Though converting such a security into new shares will inherently dilute the share price, this effect can have tax advantages by also reducing interest expense.

Related information about if-converted method:

1. If-Converted Method Definition | Investopedia
   A method used to calculate the share impact of convertible securities if they were converted into new shares. Only in-the-money convertible securities (securities ...
    
2. If-Converted Method: Definition from Answers.com
   Method used to determine the dilution of convertible securities that are not common stock equivalents entering into the computation of fully diluted earnings.
    
3. What is if-converted method? definition and meaning
   Definition of if-converted method: A method used to assess the dilution of convertible securities if converted into new shares when the stock price is above the ...
    
4. CAAA - Fully Diluted Earnings Per Share: An Elaboration of the ...
   The “if converted” method referred to is a method of computing earnings-per- share data that assumes conversion of convertible securities at the beginning of the ...
    
5. Earnings Per Share (EPS) - Roger CPA Review.
   (2) The If-Converted Method - The calculation of diluted EPS (assume anyone ... The conversion of a bond (“if converted method”) requires considering the tax ...
    
6. 260: Earnings per Share - US GAAP Codification of Accounting ...
   "If-converted method" for convertible securities 1. It is assumed that convertible securities were converted --> at the beginning of the period --> or at the time of ...
    
7. The Two-Class Method for EPS: Theory, Rule, and Implementation
   SFAS 128 requires using the if-converted method for those participating securities that ... SFAS 128 did not clearly indicate whether the if-converted method was ...
    
8. 34 EXHIBIT 2 Computing Basic EPS Using the If-Converted Method
   Jul 1, 2005 ... JULY 2005 / THE CPA JOURNAL. 34. EXHIBIT 2. Computing Basic EPS Using the If-Converted Method. Income available to common stock ...