If a company is publicly-held, it is required to report earnings per share information. A publicly-held entity is an organization whose debt or equity securities are traded on an exchange or the over-the-counter market, or which is required to file reports with the Securities and Exchange Commission (SEC). The investment community and financial press closely follow earnings per share information, considering it to be a key view of corporate profitability.
Accounting for Earnings per Share notes the types of organizations that are required to present earnings per share information and describes the requirements for calculating and presenting basic earnings per share and diluted earnings per share. It also addresses the calculation methods used to derive earnings per share, including the treasury stock method, reverse treasury stock method, and two-class method.
Learning Objectives
Upon successful completion of this course, participants will be able to:
Recognize the contents of the basic and diluted earnings per share calculations, the principle underlying these calculations, and the various methods of calculation.
Identify the types of dilutive securities.
Recognize the different ownership interests of a master limited partnership.
Note the legal authorization for requiring a publicly-held entity to make additional disclosures regarding non-GAAP information.
Major Topics
Basic Earnings per Share
Diluted Earnings per Share
Treasury Stock and Reverse Treasury Stock Methods
Two-Class method
Master Limited Partnerships
Presentation and Disclosure of Earnings per Share
Non-GAAP Disclosures
