If a firm has a complex capital structure,GAAP requires that both basic and fully diluted earnings per share must be reported.

Complex Capital Structure

A situation where a company has multiple forms of equity, such as common and preferred shares, which can affect earnings per share calculations.

GAAP

Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used in the United States for financial reporting.

Fully Diluted Earnings Per Share

A metric that calculates earnings per share assuming all dilutive securities such as options and convertibles have been converted to common stock.