REFS is
a mine of invaluable information for the private investor.
Selecting shares without its help is like trying to
clap with one hand tied behind your back.
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The
requirements of FRS3
For periods
which end on, or after, 22nd June 1993, the annual accounts
of companies are required to comply with Financial Reporting
Standard 3 (FRS3). FRS3 takes the stance that no single earnings
figure can be suitable for all purposes, and that readers of
accounts should be encouraged to make their own profit adjustments
so that the resulting earnings figure suits their particular
need.
To achieve
this, FRS3 requires that EPS reflect all Profit & Loss charges
or credits, including those which are unusual, abnormal or non-recurring.
Prior to FRS3 such items would mostly have been labelled extraordinary,
and would have been excluded from EPS altogether.
To ensure
that adjustments can be made properly, FRS3 requires the Profit
& Loss Account to carry adequate descriptive information
of any items which are, in reality, likely to be excluded from
earnings calculations, together with attributable tax and minority
interest amounts.
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