Explain Why Private Companies Are Not Required to Report EPS

question 33

Essay

Explain why private companies are not required to report EPS under according to ASPE.

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Definitions:

Capitalized

The process of recording a cost or expense on the balance sheet for the purposes of delaying full recognition of the expense over time through depreciation or amortization.

Interest Capitalization

The process of adding unpaid interest to the principal balance of a loan, thereby increasing the total amount owed.

Capital Expenditures

Capital allocated by a corporation to purchase, improve, and manage tangible assets like land, factories, or machinery.

Long-lived Assets

Assets that are expected to provide economic benefits to a company for a period longer than one year, such as buildings or equipment.