HR Block 2007 Annual Report Download - page 90

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In December 2004, Statement of Financial Accounting Standards The estimated impact of new accounting standards not yet adopted
No. 123 (revised 2004), ‘‘Share-Based Payment,’’ (SFAS 123R) was reflects current views. There may be material differences between these
issued. SFAS 123R requires all entities to recognize the cost of employee estimates and the actual impact of these standards.
services received in exchange for awards of equity instruments based
on the grant-date fair value of those awards. Compensation expense
must be recognized for the unvested portions of all awards outstanding
as of the date of adoption. We adopted SFAS 123R on May 1, 2006 and it
did not have a material impact on our consolidated financial statements.
See note 13 for additional information on our stock-based compensation
arrangements. Had compensation cost for all stock-based accounting
method prescribed under SFAS 123, our net income and earnings per
share would have been as follows:
(in 000s, except per share amounts)
Year Ended April 30, 2006 2005
Net income $490,408 $623,910
Add: Stock-based compensation expense included in
reported net income, net of taxes 37,254 28,819
Deduct: Total stock-based compensation expense
determined under fair value method for all awards,
net of taxes (47,428) (39,544)
Pro forma net income $480,234 $613,185
Basic earnings per share:
As presented $ 1.49 $ 1.88
Pro forma 1.46 1.85
Diluted earnings per share:
m62 As presented $ 1.47 $ 1.85
Pro forma 1.44 1.82
H&R BLOCK 2007 Form 10K