Earnings Per Share: Alternative Interpretations of the Three Percent Provision of APB 15 in Intermediate Accounting Textbooks.

This study examines treatment of the three percent provision of APB 15 found In the most recent editions of 11 intermediate accounting textbooks. Three alternative Interpretations of the three percent provision were found in the textbooks. The three Interpretations and their effects on reported earnings per share are discussed and illustrated. The study Includes an analysis of selected paragraphs of APB 15 and Unofficial Accounting Interpretations of APB 15 which the authors believe leads to the technically correct Interpretation of the three percent provision.