CERTYNEX IFRS ACADEMY

The management accountant of Quercy SA, which has convertible debt, describes the adjustment to the diluted numerator in a note. Which sentence is incorrect?

The numerator is adjusted for the after-tax effects of interest that would no longer be incurred on conversion.

The interest on the convertible debt is added to the numerator at its pre-tax amount.

Dividends on convertible preference shares, which would no longer be borne after conversion, are also added to the numerator, after tax.

Another change in income or expense that would disappear after conversion falls within the adjustment, after tax.