earnings per share policy?

Many of you have read our blog post on how to calculate diluted earnings per share(”EPS”) and I am continually charmed that our number one selling product is the diluted EPS calculator but then your auditors arrive and lately I’ve been getting the following question:

is there a template that documents why and how we calculate diluted earnings per share?

This is a fair statement as the diluted earnings per share template helps you determine the number of shares to be used in the denominator of the EPS calculation but you need to explain to your auditors the WHOLE process.  Typically your auditors are looking for documentation that articulates the accounting pronouncement, how you have applied it at your company and the steps involved, of which the diluted EPS calculator would be the supporting documentation (or “working paper”).  This allows them to verify the actual calculation for consistency and accordance to generally accepted accounting principles.

Fortunately when Business Ready created the earnings per share template for the calculation we also created the earnings per share policy so that you could easily have something that met audit standards.  Yup, always thinking ahead.  Good luck with your audit!