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7.2 EPS—scope and relevant guidance
Publication date: 30 Nov 2021
us Financial statement presentation guide
ASC 260, Earnings Per Share, requires the presentation of EPS for all entities that have publicly traded common stock or potential common stock (e.g., options or warrants). A public market includes a stock exchange (domestic or foreign) or over-the-counter markets. This would include circumstances when securities are quoted only locally or regionally.
Presentation of EPS is also required for a reporting entity that has made a filing or is in the process of filing with a regulatory agency in preparation for the sale of securities in a public market.
Private companies may elect to report EPS provided they comply with the guidance in ASC 260.
ASC 260-10-15-3 states that the presentation of EPS is not required for investment companies that comply with the requirements of ASC 946, Financial Services—Investment Companies, or in the financial statements of wholly-owned subsidiaries.
SAB 98 provides incremental EPS guidance for SEC registrants in the following areas:
- Carve-out entities – SAB Topic 1.B
- Convertible securities – SAB Topic 3.A
- Nominal issuances – SAB Topic 4.D
- Income or loss applicable to common stock – SAB Topic 6.B
- Quarterly per share results – SAB Topic 6.G
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