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By Paul A. Pacter, PhD, CPA, International Accounting Fellow, International Accounting Standards Committee

At its meeting in London in January, the International Accounting Standards Committee (IASC) approved a new standard (IAS 33) on earnings per share, effective for fiscal periods beginning in 1998. It requires a publicly-traded company to present basic and diluted EPS figures with equal prominence on the face of its income statement. Basic EPS reflects no dilution. Diluted EPS reflects potential dilution from financial instruments or contracts that may entitle their holders to receive common stock. IAS 33 is virtually identical to a revised EPS pronouncement expected to be adopted by FASB to replace APB Opinion 15.

EPS had not been addressed before in international accounting standards. The IASC also approved a revised IAS 14 on segment reporting. At the same time, it voted to delay publication of the revised statement until the IASC board meeting in July 1997, pending possible further harmonization efforts with FASB and the Canadian Accounting Standards Board, who are revising their current segment reporting requirements. The board discussed three related proposed standards, but decided to defer approval of issuing exposure drafts until the April 1997 meeting. The three projects deal with research and development costs, goodwill, other intangible assets, and impairment of assets.

The board also approved the membership of its new Standing Interpretations Committee, which will prepare interpretations of IASC standards much like FASB's Emerging Issues Task Force. The 12 SIC members include representatives of each of the Big Six public accounting firms, several smaller accounting firms, industry, and financial analysts. Paul Cherry of Coopers & Lybrand, Canada, will chair the SIC. Four or more dissents will result in rejection of a proposed interpretation. The IASC board must approve proposed interpretations for publication by a three-fourths vote. *

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