RegulationAccounting StandardsEarnings per share figure ‘won’t be dropped’

Earnings per share figure 'won't be dropped'

Investment society says mooted revamp of earnings numbers will not spell the end of earnings per share

An earnings per share figure will always be sought by analysts, despite
standard-setters proposals to revamp the reporting of corporate income.

The UK Society of Investment Professionals said in
a
letter to the Financial Times
today: ‘Whatever the standards-setters do, an
earnings per share figure that attempts to reflect the operating performance of
a company will always be sought by analysts and, indeed, newspapers and other
publishers of financial data.’

The row over changes to earnings figures has been prompted by a letter from
the Corporate Reporting Users’ Forum insisting that existing earnings numbers be
retained.

IASB and FASB figures have suggested different structures in recent months
encompassing a wider range of balance sheet movements than those reported in
earnings currently. A discussion paper is due to come out next year.

Edward Beale, of compliance outsourcer City Group, backed the
standards-setters in a separate
letter
to the FT
: ‘While earnings is a very useful measure and comparability of
such figures is important, the International Accounting Standards Board and the
Financial Accounting Standards Board should be encouraged to bring forward
proposals facilitating a more holistic analysis of corporate performance.’

Further Reading:

Protest
against scrapping bottom line figures

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