Financial Accounting Theory and Analysis – FARS Research (Part II)

According to statement No.128, Earnings per share, a draft of statement of principles was issued by the IASC in October 1993 for public to comment. Due to the extensive use of earnings per share in financial statistics, the IASC’s goal was to commence as to the presentation and determination of EPS in which global comparisons would be permitted. Even with limitations in EPS data, earnings were determined differently in different national methods. The FASB and the IASC believe that in international financial reporting, a consistent determined denominator will be a significant improvement to accomplish international harmonization of the accounting standards for computing earnings per share. The board pursued its EPS project in conjunction with the IASC. The project focused on EPS calculation denominator in spite of the issues concerning earning purpose. IAS 33 Earnings per Share, was issued by the IASC at the same time as the issuance of this statement. The standard provisions are the same as the statement.

The goal of the project was international harmonization, so the presentation by the FASB in its initial decisions on the income statement and earnings per share to the IASC Steering Committee and the IASC Board in September 1996 was considered a preliminary conclusion. The board finally decided to keep the required presentation dual in the exposure draft. The Boards believes it is necessary to attain international harmonization in all phases with the IASC because the difference is only one of display and not one of a conceptual nature.

International Financial Reporting Standard No.5 was recently issued by The International Accounting Standards Board on Non-current Assets Held for Sale and Discontinued Operations (IFRS 5). The most recent idea of discontinued operation exposure by the international standard setters provided the EITF with a chance to develop harmonization internationally and remove a major issue that was creating a disagreement between international standards and US.