How can companies ensure that their EPS calculations and disclosures are accurate, reliable, and in compliance with IAS 33?
Here is a list of ways in which companies can ensure that their earnings per share (EPS) calculations and disclosures are accurate, reliable, and in compliance with IAS 33:
- Develop clear policies and procedures: Companies should develop clear policies and procedures for calculating and disclosing EPS. These policies should be documented and communicated to relevant personnel.
- Ensure data accuracy: Companies should ensure that the data used in the EPS calculation is accurate and reliable. This includes ensuring that the number of shares outstanding is up-to-date and that any potentially dilutive securities are correctly identified and valued.
- Use appropriate accounting methods: Companies should use appropriate accounting methods to calculate basic and diluted EPS, and ensure that they are consistent with IAS 33 and other accounting standards.
- Review EPS calculations: Companies should review EPS calculations regularly to ensure that they are accurate and reliable. This review should be conducted by personnel with appropriate accounting expertise.
- Disclose EPS information transparently: Companies should provide transparent and accurate disclosures related to EPS in their financial statements. This includes disclosing the assumptions and methods used to calculate EPS, as well as any changes in accounting policies or methods related to EPS.
- Train relevant personnel: Companies should provide training to relevant personnel, such as accountants and financial analysts, on the requirements of IAS 33 and best practices for calculating and disclosing EPS.
- Consult with auditors: Companies should consult with their auditors to ensure that their EPS calculations and disclosures are accurate, reliable, and in compliance with IAS 33 and other accounting standards.
Overall, by following these best practices and ensuring compliance with IAS 33 and other accounting standards, companies can help to ensure that their EPS calculations and disclosures are accurate, reliable, and transparent, which can support their long-term financial success and investor confidence.