FRS 14 Earnings per Share
FRS 14 (October 1998) (PDF)
FRS 14 was effective for accounting periods ending on or after 23 December 1998. From January 2005, it was superseded by FRS 22.
Earnings per share is one of a number of indicators used in financial analysis to assess a company's performance. Broadly, it expresses a company's reported profits in terms of the amount earned in a period attributable to one ordinary share.
Companies that are listed in the UK are required to disclose earnings per share in their financial statements. FRS 14 sets out the way in which earnings per share calculations should be computed and disclosed.
FRS 14 is largely based on the International Accounting Standard, IAS 33, which was developed concurrently with the US standard-setting body, the FASB, as it progressed its own standard on the topic (FAS 128). The UK financial reporting community agreed with the ASB that it was opportune for the ASB also to revise its guidance on this topic to lend support to the harmonisation of international accounting standards, particularly as comparability of earnings per share is an important objective.
There were few changes in substance to SSAP 3 'Earnings per share', which FRS 14 superseded.
Like all standards on earnings per share, FRS 14 focuses on the number of shares to be used in the calculation. It explains, with the help of illustrative examples, how to compute basic and diluted earnings per share and sets out the additional disclosures to be given where companies choose to publish other amounts per share that might assist in explaining their performance.