Summary of Statement No. 128
Summary of Statement No. 128
Earnings per Share (Issued 2/97)
Summary
This Statement establishes standards for computing and presenting
earnings per share (EPS) and applies to entities with publicly held
common stock or potential common stock. This Statement simplifies
the standards for computing earnings per share previously found in
APB Opinion No. 15, Earnings per Share, and makes them
comparable to international EPS standards. It replaces the
presentation of primary EPS with a presentation of basic EPS. It
also requires dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation.
Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted EPS is computed similarly to fully diluted EPS pursuant to Opinion 15.
This Statement supersedes Opinion 15 and AICPA Accounting Interpretations 1-102 of Opinion 15. It also supersedes or amends other accounting pronouncements listed in Appendix D. The provisions in this Statement are substantially the same as those in International Accounting Standard 33, Earnings per Share, recently issued by the International Accounting Standards Committee.
This Statement is effective for financial statements
issued for periods ending after December 15, 1997, including
interim periods; earlier application is not permitted. This
Statement requires restatement of all prior-period EPS data
presented. Earnings per Share