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Technology Stocks : America On-Line: will it survive ...?

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To: Art Stone who wrote (5686)11/7/1997 11:46:00 PM
From: jack rand  Read Replies (1) of 13594
 
>>When computing EPS, the accountants insist that you take all
>>options, warrants, preferred stock, etc... which might Dilute
>>future earnings (if exercised), and present the EPS number
>>based on a worse case scenario.

FASB rules require that fully diluted shares be used to compute
EPS when net is is positive and primary shares when net is negative.

A recent rule (effective for AOL's FY98) also requires that companies disclose in their 10K's the prospective impact of options on EPS, using fair value pricing models.
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