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Handbook: Earnings per share

Handbooks | September 2023

Latest edition: Our comprehensive guide to EPS, with new and updated interpretive guidance on forward purchase/sale contracts and unit structures.

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Our updated handbook explains the principles of ASC 260 through Q&As and examples using a step-by-step approach to basic and diluted EPS calculations and providing guidance on simple and complex instruments.

Applicability

  • All entities that present EPS information

Relevant dates

  • Effective immediately

Key Impacts

  • Q&As and examples that answer the questions we are encountering in practice
  • Uses a step-by-step approach through the calculations of basic and diluted EPS
  • Provides in-depth discussion of EPS calculations for various instruments
  • Appendix presents guidance relevant before the adoption of ASU 2020-06 (convertible debt and contracts in own entity) and ASU 2021-04 (accounting for modifications of written call options)

Report Contents

  • Scope
  • Basic EPS – The foundations
  • Diluted EPS – The foundations
  • Participating securities and the two-class method
  • Consideration of specific instruments
  • Retrospective adjustments
  • EPS in interim financial statements
  • Presentation, disclosure and other matters
  • Select ASC 260 illustrations
  • EPS pre-ASU 2020-06 and/or ASU 2021-04

Download the document:

Earnings per share

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Convertible instruments and contracts in an entity’s equity

Newly effective ASU 2020-06 introduces new requirements and impacts EPS calculations.

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EPS: Back-to-basics refresher

KPMG professionals discuss the fundamentals of calculating and presenting EPS, as well as latest developments.

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FASB amends convertible debt & contracts in own equity

KPMG reports on amendments to reduce accounting models for convertible instruments and simplify contracts in own equity.

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Mahesh Narayanasami
Partner, Dept. of Professional Practice, KPMG US
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Managing Director, Dept. of Professional Practice, KPMG US
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Mahesh Narayanasami
Partner, Dept. of Professional Practice, KPMG US
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Rivka Grund-Sender
Managing Director, Dept. of Professional Practice, KPMG US
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