Last Updated on 07/02/2020 by 75385885

IAS 33 Earnings per Share

IAS 33 Objective Scope Definitions

Objective

1 The objective of this Standard is to prescribe principles for the determination and presentation of earnings per share, so as to improve performance comparisons between different entities in the same reporting period and between different reporting periods for the same entity. Even though earnings per share data have limitations because of the different accounting policies that may be used for determining ‘earnings’, a consistently determined denominator enhances financial reporting. The focus of this Standard is on the denominator of the earnings per share calculation.

Scope

2 This Standard shall apply to

1. the separate or individual financial statements of an entity:
   1. whose ordinary

Last Updated on 07/02/2020 by 75385885

IAS 33 Earnings per Share

IAS 33 Measurement

Basic earnings per share

9 An entity shall calculate basic earnings per share amounts for profit or loss attributable to ordinary equity holders of the parent entity and, if presented, profit or loss from continuing operations attributable to those equity holders.

10 Basic earnings per share shall be calculated by dividing profit or loss attributable to ordinary equity holders of the parent entity (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the period.

11 The objective of basic earnings per share information is to provide a measure of the interests of each ordinary share of a parent entity in the … Read more

Last Updated on 07/02/2020 by 75385885

IAS 33 Earnings per Share

IAS 33 Retrospective adjustments

64 If the number of ordinary or potential ordinary shares outstanding increases as a result of a capitalisation, bonus issue or share split, or decreases as a result of a reverse share split, the calculation of basic and diluted earnings per share for all periods presented shall be adjusted retrospectively.

If these changes occur after the reporting period but before the financial statements are authorised for issue, the per share calculations for those and any prior period financial statements presented shall be based on the new number of shares.

The fact that per share calculations reflect such changes in the number of shares shall be … Read more

Last Updated on 07/02/2020 by 75385885

IAS 33 Earnings per Share

IAS 33 Presentation

66 An entity shall present in the statement of comprehensive income basic and diluted earnings per share for profit or loss from continuing operations attributable to the ordinary equity holders of the parent entity and for profit or loss attributable to the ordinary equity holders of the parent entity for the period for each class of ordinary shares that has a different right to share in profit for the period. An entity shall present basic and diluted earnings per share with equal prominence for all periods presented.

67 Earnings per share is presented for every period for which a statement of comprehensive income is presented. If … Read more

Last Updated on 07/02/2020 by 75385885

IAS 33 Earnings per Share

IAS 33 Disclosure

70 An entity shall disclose the following:

1. the amounts used as the numerators in calculating basic and diluted earnings per share, and a reconciliation of those amounts to profit or loss attributable to the parent entity for the period. The reconciliation shall include the individual effect of each class of instruments that affects earnings per share.
2. the weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share, and a reconciliation of these denominators to each other. The reconciliation shall include the individual effect of each class of instruments that affects earnings per share.
3. instruments (including contingently issuable shares)

Last Updated on 07/02/2020 by 75385885

IAS 33 Earnings per Share

IAS 33 Application guidance EPS

Appendix A Application guidance

This appendix is an integral part of the Standard.

Profit or loss attributable to the parent entity

A1 For the purpose of calculating earnings per share based on the consolidated financial statements, profit or loss attributable to the parent entity refers to profit or loss of the consolidated entity after adjusting for non-controlling interests.

Rights issues

A2 The issue of ordinary shares at the time of exercise or conversion of potential ordinary shares does not usually give rise to a bonus element. This is because the potential ordinary shares are usually issued for fair value, resulting in a proportionate change … Read more

Last Updated on 07/02/2020 by 75385885

IAS 33 Earnings per Share

IAS 33 Increasing rate preference shares

Illustrative examples

These examples accompany, but are not part of, IAS 33.

Example 1 Increasing rate preference shares

Reference: IAS 33, paragraphs 12 and 15

Entity D issued non-convertible, non-redeemable class A cumulative preference shares of CU100 par value on 1 January 20X1. The class A preference shares are entitled to a cumulative annual dividend of CU7 per share starting in 20X4.

At the time of issue, the market rate dividend yield on the class A preference shares was 7 per cent a year. Thus, Entity D could have expected to receive proceeds of approximately CU100 per class A preference share if the … Read more

Last Updated on 07/02/2020 by 75385885

IAS 33 Earnings per Share

IAS 33 Weighting shares in a period

Example 2 Weighted average number of ordinary shares

Reference: IAS 33, paragraphs 19-21