In January 1996, FASB issued an exposure draft of a standard that would address both the computation of earnings per share and the disclosure of information about a firms capital structure However, the board divided these topics into two standards Statement of Financial Accounting Standards No 128 ...

1 FASB split the two standards because the portion of the exposure draft dealing with earnin ...

In January 1996, FASB issued an exposure draft of a standard that would address both the computation

Question:

In January 1996, FASB issued an exposure draft of a standard that would address both the computation of earnings per share and the disclosure of information about a firm’s However, the board divided these topics into two standards. Statement of Financial Accounting Standards No. 128 was issued to address earnings per share issues and Statement of Financial Accounting Standards No. 129 was issued to address information related to the of firms. Read Statement of Financial Accounting Standards No. 129 and answer the following questions.

1. Why did FASB decide to split the exposure draft into two final standards?

2. Why did FASB make SFAS No. 129 applicable to nonpublic entities?

3. Why did FASB include securities that do not impact the computation of earnings per share in these disclosure requirements?

Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a...