In the event of a restatement of prior period earnings, retrospective application of a new accounting principle, or a discontinued operation, the reporting entity should restate prior EPS data and disclose the per-share effect of the restatement in the period of restatement. Entities should not reflect nonrecognized subsequent events when restating previously-reported EPS for a prior period. If restated, EPS should only be adjusted to include the effect of the prior period adjustment.

The reporting entity should compute restated EPS as if the restated income or loss had been reported originally in the prior periods. It is possible that common stock assumed to be issued upon exercise, conversion, or issuance of potential common shares may not be included in the computation of restated EPS amounts. That is, retroactive restatement of income from continuing operations could cause potential common shares originally determined to be dilutive to become anti-dilutive or vice versa. Retroactive restatement may also cause the numerator of the EPS computation to change by an amount that differs from the amount of the retroactive adjustment.