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Retroactive share adjustment belongs in a reconciled numerator-and-denominator workpaper. A retroactive share adjustment recasts current and comparative share and per-share data for a qualifying stock dividend, split, reverse split, or similar unit change. Apply the factor to every affected interval and potential-share term.
Apply it
A two-for-one split occurs after year-end but before financial statements are issued. A previously computed 1,250,000 weighted-average denominator becomes 2,500,000, and the comparative EPS amounts use the same unit basis.
Review retroactive share adjustment against stock dividend. Reconcile retroactive share adjustment to stock split, the dated retroactive share adjustment evidence, and its final presentation.
The retroactive share adjustment record ties stock dividend to its source date, measured amount, and stock split effect.
Keep the boundary clear
The split date does not create a new time-weighted interval for the recast. Ordinary cash issues and repurchases remain weighted from their actual dates.
Authority
Read ASC 260-10-55-12 for retroactive treatment of stock dividends and stock splits.
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Learning resources
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Build on these ideas
- Weighted-average common shares — Apply
To apply this concept: Required. This earlier step supplies an input required by the EPS workpaper.