What is ‘S&P Core Earnings’
The Standard and Poor’s revised version of the measurement of core earnings, which excludes any gains related to pension activities, net revenues from the sale of assets, impairment of goodwill charges, prior-year charge and provision reversals, and settlements related to litigation or insurance claims. Expenses related to employee stock option grants, pensions, restructuring of present operations or any merger and acquisition costs, R&D purchases, write-downs of depreciable or amortizable operating assets, and unrealized gains/losses from hedging activities are all included in the core earnings.
Explaining ‘S&P Core Earnings’
This is a new standard created by S&P with the assistance from the financial and investment community. These core earnings provide for transparency and consistency, as well as a more stringent definition of a company’s core earnings, clearly setting out exactly what can and cannot be considered earnings and expenses.
Further Reading
- Top Five Executives' Share of Core Earnings – search.proquest.com [PDF]
- The differential value relevance of S&P's core earnings versus GAAP earnings: the role of stock option expense – onlinelibrary.wiley.com [PDF]
- Earnings management using classification shifting: An examination of core earnings and special items – meridian.allenpress.com [PDF]
- Reporting financial performance – meridian.allenpress.com [PDF]
- Comparative Value-relevance of GAAP, IBES, S&P Core, Cash Earnings and Cash Flows – papers.ssrn.com [PDF]
- In search of a pro forma earnings standard – search.proquest.com [PDF]
- Disclosure strategies among S&P 500 firms: Evidence on the disclosure of non-GAAP financial measures and financial statements in earnings press releases – www.sciencedirect.com [PDF]
- The value relevance of S&P's core earnings vs. GAAP earnings – go.gale.com [PDF]
