We have published a new white paper, Earnings per share primer. Earnings per share (EPS) is a measurement of an entity’s profitability on a per-share basis and is one of the leading metrics used by investors. Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 260, Earnings Per Share, addresses the calculation, presentation, and disclosure requirements for EPS by entities that have (a) issued common stock that trades in a public market or (b) made a filing, or are in the process of filing, with a regulatory agency in preparation for a sale of common stock in a public market.
This white paper highlights the scope of the EPS requirements, the concepts of basic and diluted EPS, and the presentation and disclosure requirements for EPS. It also includes examples of:
- Situations and securities that may require presentation of EPS under ASC 260
- Common items that may result in an adjustment to income available to common stockholders
- Select securities and their potential impact on the weighted-average shares outstanding calculation used in basic EPS
For further guidance on identifying participating and dilutive securities, as well as the methods for calculating EPS, refer to ASC 260.
