NEWS RELEASE 09/30/05
FASB Issues Revised Proposal to Improve Reporting of Earnings per Share and Enhance Comparability in Cross-Border Financial Reporting
Norwalk, CT, September 30, 2005—The Financial Accounting Standards Board (FASB) today issued a revised Exposure Draft of a proposed standard that would make targeted improvements to the reporting of earnings per share. Specifically, the proposed changes would clarify earnings per share computations involving certain instruments, such as mandatorily convertible instruments and contractual obligations that may be settled with cash or by issuing shares. The Exposure Draft is a revision of the December 2003 proposed Statement, Earnings per Share, which was issued as part of the Board’s ongoing efforts with the IASB to bring about convergence between U.S. and international accounting standards.
"We believe the proposal issued today will improve the reporting of earnings per share in several important ways, as it simplifies the existing guidance and produces similar earnings per share results for economically similar situations. Moreover, the proposal will enhance the comparability of financial reporting internationally by eliminating differences between Statement 128 and comparable International Financial Reporting Standards," said G. Michael Crooch, FASB Board member. "We encourage and look forward to receiving feedback from our constituents on this important initiative."
The proposed Statement would be effective for interim and annual periods ending after June 15, 2006. A copy of the proposal may be downloaded from the FASB’s website at www.fasb.org.
The Financial Accounting Standards Board invites public comment on this and all Exposure Drafts. The comment deadline for today’s Exposure Draft is November 30, 2005. Comment letters should be submitted electronically to director@fasb.org or via regular mail to:
Technical Director
Financial Accounting Standards Board
401 Merritt 7
P.O. Box 5116
Norwalk, CT 06856-5116
About the Financial Accounting Standards Board
Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors and others rely on credible, transparent and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.