Treasury-Share Method for Options/Warrants
Install and import
npm install fintech-algorithmsimport { calculateTreasuryShareMethod } from "fintech-algorithms/earnings-and-per-share-analytics/basic-and-diluted-eps/treasury-share-method-for-options-warrants";Signature
calculateTreasuryShareMethod(input)Worked example
executed Captured by running this function on the input its own test provides. Real output of real code — but not asserted against a published figure.
Input
{
"entity_id": "EXAMPLE-PLC",
"instrument_id": "2024-WARRANTS",
"instrument_type": "WARRANT",
"period_start": "2025-01-01",
"period_end": "2025-12-31",
"as_of": "2026-02-20T16:30:00Z",
"accounting_framework": "IFRS",
"period_application": "IFRS_DIRECT_PERIOD",
"currency": "USD",
"basic_control_numerator": "120",
"basic_weighted_average_shares": "50",
"earnings_scale": "1000000",
"share_scale": "1000000",
"ordinary_shares_under_instrument": "10"
}Showing 14 of 51 fields.
Call
calculateTreasuryShareMethod(input)Returns
object with 53 fields: metric, entity_id, instrument_id, instrument_type, period_start, period_end, as_of, accounting_framework, …
{
"metric": "treasury_share_method_options_warrants",
"entity_id": "EXAMPLE-PLC",
"instrument_id": "2024-WARRANTS",
"instrument_type": "WARRANT",
"period_start": "2025-01-01",
"period_end": "2025-12-31",
"as_of": "2026-02-20T16:30:00Z",
"accounting_framework": "IFRS",
"period_application": "IFRS_DIRECT_PERIOD",
"currency": "USD",
"basic_control_numerator_base": "120000000",
"basic_weighted_average_shares_base": "50000000",
"shares_under_instrument_base": "10000000",
"cash_exercise_price_per_share": "15"
}Showing 14 of 53 fields.
Diagrams
Calculation flow
Treasury-share method decision flow
flowchart TD
F{"Which accounting framework?"} -->|IAS 33| FI["Use IAS 33 assumed-proceeds treatment and IFRS 2 future-service value"]
F -->|US GAAP| FG["Use treasury stock method and average unrecognized compensation; exclude excess tax benefits"]
F -->|Declared local| FO["Load documented local proceeds and period policy"]
FI --> A["Receive one fixed option or warrant series"]
FG --> A
FO --> A
A --> B{"One non-contingent series, unchanged terms, complete sources?"}
B -->|No| R["Reject incomplete contract"]
B -->|Yes| P{"Framework and period application compatible?"}
P -->|No| V["Route to required period aggregation variant"]
P -->|Yes| T["Weight gross shares while instrument is outstanding"]
T --> E["Effective price = cash + permitted service + permitted tax + declared-other proceeds"]
E --> M{"Average market price exceeds effective price?"}
M -->|No| X["Zero incremental shares; exclude"]
M -->|Yes| S["Repurchase shares = gross weighted shares × effective price / market price"]
S --> I["Incremental shares = gross weighted shares − repurchase shares"]
I --> C["Candidate EPS = unchanged Basic numerator / Basic shares + incremental shares"]
C --> D{"Exact candidate below exact Basic EPS?"}
D -->|Yes| Y["Dilutive: include standalone series"]
D -->|No or equal| N["Antidilutive: exclude"]
How it works
This page states the contract — how to call it correctly. The article explains the concept: why it works, and where it breaks.
References
- R01 - IAS 33 Earnings per Share
- R02 - FASB ASU 2020-06, Debt with Conversion and Other Options
- R03 - FASB ASU 2016-09, Improvements to Employee Share-Based Payment Accounting
- Research reconciliation
- Historical evidence status