Summary of Statement No. 55
Summary of Statement No. 55
Determining whether a Convertible Security is a Common Stock Equivalent--an amendment of APB Opinion No. 15 (Issued 2/82)
Summary
APB Opinion No. 15, Earnings per Share, states that a
convertible security is a common stock equivalent if it has a cash
yield at the time of issuance of less than 66 2/3 percent of the
then current bank prime interest rate. The Board has concluded that
the prime rate should be replaced as the benchmark interest rate in
the cash yield test. This Statement substitutes the average Aa
corporate bond yield as the new benchmark rate.