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. Accounting Standards Codification (ASC) Topic 260, Earnings Per Share, addresses the calculation, presentation and disclosure requirements for EPS by entities that have either issued common stock that trades in a public market or 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.
Our updated Financial Reporting Insights, Earnings Per Share, highlights the scope of the EPS requirements, the concepts of basic and diluted EPS, and the presentation and disclosure requirements for EPS. This publication is intended to assist companies in applying the requirements of ASC 260 for calculation and disclosure of EPS.
Our Financial Reporting Insights has been updated to
- Expand guidance on participating securities and the two-class method
- Add illustrative examples of the two-class method
- Incorporate guidance on master limited partnerships
- Describe common dilutive securities and the method used to calculate their dilutive effect
- Add a comprehensive example of quarterly and full year basic and diluted EPS calculations
