method used to determine the dilution of convertible securities that are not common stock equivalents entering into the computation of fully diluted earnings per share. The method assumes convertible securities are converted at the beginning of the year or at issuance date, if later. The TREASURY STOCK METHOD is used to account for any cash received from convertible securities when the if-converted method is used. However, theoretical stock acquisitions are assumed only if the market price of the stock is greater than the exercise price.