FASB looking for feedback on proposed earnings per share revision

The Financial Accounting Standards Board has issued a revised Exposure Draft (ED) of a proposed Statement of Financial Accounting Standards, Earnings per Share — an amendment of FASB Statement No. 128. The proposed Statement seeks to improve financial reporting by clarifying and simplifying the method of calculating earnings per share (EPS), while promoting the international convergence of accounting standards by eliminating major differences that currently exist between FASB Statement No. 128, Earnings per Share, and International Accounting Standard (IAS) 33, Earnings per Share.

The ED seeks feedback from constituents on whether the proposed statement achieves its goal of amending Statement 128 in a way that simplifies and converges the computation of the denominator of EPS with proposed amendments to IAS 33, issued separately by the International Accounting Standards Board (IASB). As proposed, the Statements are intended to improve the comparability of EPS because the denominator used to compute EPS under Statement 128 would be the same as the denominator used to compute EPS under IAS 33, with limited exceptions. Those limited exceptions relate to certain instruments for which the underlying accounting under U.S. generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) is different.

"In addition to improving financial reporting, the proposed amendment to Statement 128 is an important step in the international convergence process," states FASB practice fellow Sheri Wyatt. "By eliminating the differences between Statement 128 and IAS 33, the proposed amendment will enhance the comparability of EPS reported under U.S. GAAP and IFRS."

As proposed, an entity would be required to apply the requirements of this proposed Statement as of the beginning of a fiscal year, and interim periods within those fiscal years, generally through retrospective application to prior periods. Earlier application is prohibited. The proposed ED does not include a specific effective date for a final Statement. The FASB will determine the effective date when it approves the final amendments to Statement 128.

The proposed ED invites individuals and organizations to submit comments on the proposed guidance. Responses must be received in writing by December 5, 2008. Interested parties should submit their comments by e-mail to director@fasb.org, File Reference No. 1240-001. Those without access to e-mail may send their comments to the "Technical Director&3151;File Reference No 1240-001" to:

Financial Accounting Standards Board
401 Merritt 7
PO Box 5116
Norwalk, CT, 06856-5116

Responses should not be sent by fax. All comments received by the FASB are considered public information. Those comments will be posted to the FASB website and included as part of the project record with other project materials.

You can read the ,a href="http://www.fasb.org/draft/rev_ed_eps_amend_st128.pdf" target="_blank">complete Exposure Draft.
 

You may like these other stories...

It's not a reality—yet—but accounting software is poised to eliminate accountants. We are at a tipping point for many similar professions: online education replacing professors, legal software replacing...
Inversions: Loophole Is the ProblemJacob J. Lew, the U.S. Treasury Secretary, published an opinion piece in the Wall Street Journal that "the system has become full of inefficiencies and special-interest loopholes. That...
School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.