Earnings per Share, Stock Prices, and APB Opinion No. 15.

The article discusses the treasury stock method, which is often used by companies with outstanding stock warrants to calculate their earnings per share. The Accounting Principles Board (APB) Opinion Number 15 relegates stock prices and earnings per share calculations. Use of this technique causes the stock prices to directly impact the earnings per share. The calculation that is recommended by the APB to calculate earnings per share may be flawed and could conflict with the consistency principle. The article concludes that a calculation that incorporated difference equations could solve the problem.