What are ‘Headline Earnings’
Headline earnings is a basis for measuring earnings per share implemented by the Institute of Investment Management and Research. This method accounts for all the profits and losses from operational, trading, and interest activities, that have been discontinued or acquired at any point during the year. Excluded from this figure are profits or losses associated with the sale or termination of discontinued operations, fixed assets or related businesses, or from any permanent devaluation or write off of their values.
Explaining ‘Headline Earnings’
Headline earnings provides a stringent measurement tool. Investors can use it to compare and contrast different companies according to the standard method of accounting for net income (and EPS).
Some companies report headline earnings per share in addition to required EPS figures.
Further Reading
- FRS3 earnings, headline earnings, and accounting-based valuation models – www.tandfonline.com [PDF]
- Headline earnings per share: financial managers' perceptions and actual disclosure practices in South Africa – journals.co.za [PDF]
- Reporting financial performance – meridian.allenpress.com [PDF]
- Opportunistic disclosure in press release headlines – www.tandfonline.com [PDF]
- Analysts' perceptions of 'earnings quality' – www.tandfonline.com [PDF]
- Headline salience, managerial opportunism, and over-and underreactions to earnings – meridian.allenpress.com [PDF]
- Financial reporting regulation and the reporting of pro forma earnings – meridian.allenpress.com [PDF]
- DO SOCIALLY CONSCIOUS COMPANIES PROVIDE BETTER FINANCIAL PERFORMANCE? AN EXPLORATORY STUDY. – www.ceeol.com [PDF]
- Moving the financial accounting research front forward: the UK contribution – www.sciencedirect.com [PDF]
