Other Adjustments

Category

Income Statement

Units

Currency

US-GAAP elements

PreferredStockDividendsAndOtherAdjustmentsUndistributedEarningsLossAllocatedToParticipatingSecuritiesBasicPreferredStockRedemptionPremiumTemporaryEquityAccretionToRedemptionValue

Reference

ASC 260, Earnings Per Share

Source

Reported in SEC EDGAR filings (US-GAAP XBRL taxonomy)

Other adjustments are the amounts, apart from ordinary preferred dividends, that a company adds to or subtracts from net income attributable to the parent to arrive at net income available to common shareholders. They capture claims on earnings by holders of securities other than common stock, and certain equity transactions that ASC 260 treats as affecting common shareholders' earnings.

For most companies the field is zero. It becomes meaningful for companies with participating securities, redeemable preferred stock, or unusual preferred stock transactions.

The adjustments come from the earnings per share rules in ASC 260 and are calculated from figures reported in SEC filings. Common examples include earnings allocated to participating securities under the two-class method, tagged UndistributedEarningsLossAllocatedToParticipatingSecuritiesBasic, which applies when securities such as certain unvested share awards or some preferred classes share in dividends with common stock. They also include the premium paid to redeem preferred stock above its carrying amount, tagged PreferredStockRedemptionPremium, and accretion of redeemable securities toward their redemption value, tagged TemporaryEquityAccretionToRedemptionValue. Some companies report preferred dividends and these items as one combined figure, tagged PreferredStockDividendsAndOtherAdjustments.

These items can move the numerator in either direction. Paying more than carrying value to retire preferred stock reduces earnings available to common, while repurchasing preferred below carrying value increases them. Accretion charges reduce them, and the allocation to participating securities rises as net income rises, because those holders share in undistributed earnings. None of these items pass through the income statement's expense lines. They are adjustments made below net income purely for per-share purposes.

Because they are specific to each company's capital structure, other adjustments are best read alongside the earnings per share footnote, which reconciles net income to the EPS numerator line by line. A large or recurring adjustment signals that some holders outside the common stock, such as preferred investors or award holders, have a claim on profits that total net income does not reveal.