An investigation into earnings per share disclosures in South Africa.
Loading...
Date
2004
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
This dissertation examines Earning per share (EPS) as a disclosure requirement for
listed companies by investigating firstly, EPS disclosures in annual reports of certain
selected JSE listed companies and secondly, the attitudes of the preparers of those
annual reports to a number of issues relating to EPS. The three mandatory EPS
disclosures - Basic EPS, Diluted EPS and Headline EPS - are discussed with a view
to determining their information content and reporting framework. This study also
considers whether cash based measures of performance are better than earnings based measures.
Due to the reliance placed on reported EPS numbers this study attempts, by an
examination of annual reports, to provide evidence as to whether or not South African
companies are correctly calculating and disclosing the various EPS measures. By
means of a questionnaire survey into the attitudes of the preparers of annual reports,
this study also attempts to provide evidence as to the importance of the EPS measures
as well as the preparers' perceptions on the appropriateness of the Headline earnings definition.
The annual report survey into EPS disclosures revealed that South African companies
are correctly calculating and disclosing Basic EPS. Even-though all companies
correctly calculate Diluted EPS, most companies do not properly disclose Diluted
EPS information. As far as Headline EPS is concerned, the annual report survey
revealed that many South African companies make disallowed Headline earnings
adjustments with most offenders disclosing higher Headline EPS numbers as a result.
The survey into the attitudes of preparers of company reports towards various matters
concerning EPS revealed that preparers of annual reports consider Headline EPS to be
the most important earnings based measure of performance and the adopted Headline
earnings definition as being appropriate. It is therefore important that companies
calculate and disclose Headline EPS correctly.
Description
Thesis (M.Acc.)-University of KwaZulu-Natal, 2004.
Keywords
Earnings per share--South Africa., Disclosure in accounting--South Africa., Theses--Accounting.