Magazine article The CPA Journal

FASB Issues Two New Standards

Magazine article The CPA Journal

FASB Issues Two New Standards

Article excerpt

In March 1997, FASB issued two new statements of financial accounting-No. 128 Earnings per Share and No. 129 Disclosure of Information About Capital Structure. The two standards are the result of an exposure draft issued in January 1996 on earnings per share. The board decided to split the standard because the earnings per share aspects relate to public companies, whereas the capital structure disclosures apply to all entities.

Earnings per Share. Statement 128 is an effort to simplify the current standards in the U.S. for computing earnings per share (EPS) and make them compatible with international standards. The International Accounting Standards Committee recently issued a comparable standard. Statement 128 applies to entities with publicly held common stock or potential common stock and is effective for financial statements issued for periods ending after December 15, 1997. It replaces APB Opinion 15, Earnings per Share. Opinion 15 required that entities with simple capital structures present a single "earnings per common share" on the face of the income statement, whereas those with complex capital structures had to present both "primary" and "fully diluted" EPS. …

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