- The net income or profit of a business. Because of the importance of earnings in calculating the earnings per share, there has been considerable debate as to its definition. Under Statement of Standard Accounting Practice (SSAP) 6, earnings excluded extraordinary items; this permitted some companies to use creative accounting to ensure that they reported a high earnings figure. The introduction of Financial Reporting Standard 3 removed SSAP 6 and amended SSAP 3, also concerned with earnings, so that any extraordinary items are now included in the calculation. This has led to a greater volatility in the earnings per share figure.
Accounting dictionary. 2014.
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