Besides net income, GAAP also requires public enterprises to report earnings
per share data on their income statements. Earnings per share is the amount
of net income associated with each share of common stock. Dilutive
convertible securities increase the number of Common Stock, if exercised.
This reduces the basic earnings per share. Antidilutive convertible securities
could increase a company’s earnings per share, if exercised or converted into
Common Stock. Shareholders usually resist dilution because it lessens their
existing equity and reduces a company’s earnings per share. Shareholders
would rather have antidilutive convertible securities as these protect them by
keeping the overall number of shares outstanding the same. &&
References
Whalen, J. M., Jones, J. P., & Pagach, D. P. (2017). Intermediate accounting:
Reporting and analysis. Boston, MA: Cengage Learning.
The Investopedia Team. (2021). Dilutive Securities vs. Anti-Dilutive
Securities: What's the Difference?
https://www.investopedia.com/ask/answers/102714/what-are-differences-
between-dilutive-securities-and-antidilutive-securities.asp
