SUMMARY OF

CRITICISMS OF APB OPINION NO. 15 EPS STANDARDS

GENERAL CRITICISMS	CRITICISMS REGARDING POTENTIAL DILUTIVE SECURITIES	CRITICISMS REGARDING WEIGHTED AVERAGE SHARES
Standards were arbitrary, overly complex, and produced information of questionable relevance and reliability.	Standards failed to consider the probability that the stock price would reach a level that would encourage conversion.	Shares used in computing EPS were inconsistent with shares shown on the balance sheet.
The cost of calculating, reporting, and auditing earnings per share exceeded the benefits provided by the information.	Standards failed to recompute common stock equivalents each year as the market changed.	Earnings per share could be manipulated by issuing or reacquiring shares during the year.
Earnings per share attempted to eliminate financial statements analysis by summarizing profitability performance in one calculation. EPS had little to do with accounting fundamentals and should be left to financial analysts.	Convertible securities of less risky companies were more likely to be classified as common stock equivalents.	The calculation of weighted average shares assumed that earnings were uniform throughout the year.
.	Empirical tests showed that common stock equivalents were no more likely to be converted than non-common stock equivalents.	.
.	Only two discrete figures were shown for earnings per share while actual dilution could vary from no dilution to maximum dilution.	.