The Financial Accounting Standards Board is responsible for the development of the standards of financial accounting in the United States of America. The FASB Earnings Per Share is a special project that has been added in the agenda as it serves the prime mission of the board.
The prime aim of Financial Accounting Standards Board is to develop the financial accounting standards to such a level that it can compete with the international standards set for the financial accounting practices. By adding the FASB Earnings Per Share project in the agenda, the Board wants to provide simple processes of calculating earnings per share and so that new rules have been introduced for the purpose.
Earnings per share is one of the most commonly used statistics. These are used mainly by the shareholders and financial analysts and other professionals related to the financial field.
The statistics about the earnings per share provides a clear picture of a companies present financial condition and its potential to produce profits. This also provides information about the cash flow of the common shares.
It is also an indicator of the investors’ faith in the respective company.The calculation process of earnings per share is different in separate countries.
In some countries the process is simple and in others, it is very complex. These different processes are very problematic for the financial analysts as well as for all the shareholders. The FASB Earnings Per Share project’s main objective is to standardize the process so that it can maintain pace with the ever expanding global market.