Earnings per share (EPS) is a popular and useful measure of a company's profit performance. Companies with publicly held common stock or potential common stock must disclose their EPS information. EPS tells you how much profit (or loss) each share of common stock has earned after adjustments for potential dilution from options, warrants, and convertible securities are factored in. This course covers the computation, reporting, presentation, and disclosure requirements associated with EPS as stipulated in ASC 260 Earnings Per Share. It includes excerpts from and references to ASC 260, and interpretive guidance. It also provides examples to illustrate the application. Finally, it includes insights from the Securities and Exchange Commission staff.
Learning Objectives
After completing this course, you should be able to:
Identify the difference between two different capital structures-simple and complex
Recognize how to compute basic earnings per share in a simple capital structure
Recognize how to compute diluted earnings per share in a complex capital structure
Identify the presentation and disclosure requirements of EPS data
Major Topics
Overview of ASC 260
Basic Principles
General Rules
Basic EPS
Distinguish between Dilutive and Antidilutive Security
Application of the Two-Class method
Dividends and Stock splits
Interim Financial Reports
Limitations of EPS
