Restricted stock units (RSU) are one of the potentially dilutive contingent common shares that may impact the calculation of EPS. Although restricted stock is similar to an RSU, restricted stock is a transfer of stock earn the right to those shares. Once employees earn the right to such shares, the company delivers the shares to them.
Unvested RSUs are u.sually excluded fitim the denominator in the computation of basic EPS until they become vested. Once vested, tho.se RSUs are included in the computation of basic EPS, regardless of whether the shares have actually been issued. Unvested RSUs, on the other hand, can have a dilutive effect on diluted EPS as determined by the treasury stock method.