News Release 02/24/16


Norwalk, CT—February 24, 2016—A Post-Implementation Review (PIR) of Financial Accounting Standards Board (FASB) Statement No. 128, Earnings Per Share, (issued in 1997) concluded that Statement 128 accomplished its objectives of simplifying the computation of earnings per share (EPS) and achieving greater compatibility with international accounting standards. The PIR also concluded that Statement 128 provides useful information to users of financial statements.

“The PIR report on Statement 128 tells us that, overall, the standard on earnings per share is useful to investors and brought about greater comparability with International Financial Reporting Standards,” said FASB Chair Russell G. Golden. “Though organizations with complex capital structures sometimes find the standard difficult to apply, overall the standard is operational. Therefore, the FASB does not plan to undertake a comprehensive review of Statement 128.”

The PIR team developed its final report based on input from financial statement users, preparers, auditors, and regulators.

The Statement 128 PIR team reached the following overall conclusions:
  • Statement 128 resolved the issues underlying its stated need and achieved its expected benefits—as it improved and simplified the computation of EPS, and achieved compatibility with international standards.
  • Investors rely significantly on EPS (particularly diluted EPS) that is computed using the requirements of Statement 128. Investors also find the information reported by organizations about EPS in their financial statements useful.
  • Overall, Statement 128 is understandable, can be applied as intended, and enables information to be reported reliably. Organizations with complex capital structures sometimes find it difficult to apply Statement 128 because of the complexity of the financial instruments that they issue (particularly instruments with participating features).
  • The changes made to financial and operating practices as a result of Statement 128 were not significant or unexpected.
  • There were no significant unanticipated consequences resulting from the application of Statement 128.
  • Overall, implementation and ongoing compliance costs associated with Statement 128 were not significant, and were consistent with both FASB’s and stakeholders’ expectations.
The PIR team had no standard-setting process recommendations as a result of the review.

The review of Statement 128 was undertaken by an independent team of the Financial Accounting Foundation (FAF), the parent organization of the FASB and the Governmental Accounting Standards Board (GASB). The team’s formal report is available here. The FASB’s response letter to the report is available here.

The next PIR of a FASB standard will not be conducted for a few years, as the PIR team has completed all the reviews of significant FASB standards that have been effective for at least two to three years.

For more information on the PIR process, visit the FAF website.

About the Financial Accounting Foundation

Established in 1972, the Financial Accounting Foundation (FAF) is the independent, private-sector, not-for-profit organization based in Norwalk, Connecticut responsible for the oversight, administration, financing, and appointment of the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB). The FASB and GASB establish and improve financial accounting and reporting standards—known as Generally Accepted Accounting Principles, or GAAP—for public and private companies, not-for-profit organizations, and state and local governments in the United States. For more information, visit

About the Financial Accounting Standards Board

Established in 1973, the FASB is the independent, private-sector organization, based in Norwalk, Connecticut, that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles (GAAP). The FASB is recognized by the Securities and Exchange Commission as the designated accounting standard setter for public companies. FASB standards are recognized as authoritative by many other organizations, including state Boards of Accountancy and the American Institute of CPAs (AICPA). The FASB develops and issues financial accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to investors and others who use financial reports. The Financial Accounting Foundation (FAF) supports and oversees the FASB. For more information, visit