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Written put options and forwards for EPS calculations

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Topics hide Written put options and forwards EPS implications Dilutive or anti-dilutive? Denominator adjustment – The reverse treasury share method Case – Written puts Workings Written put options and forwards Written puts and forwards, as discussed in this narrative, are those that may require an entity to purchase its ordinary shares. Typically, these instruments are … Read more

The reverse treasury share method

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Use back button from the brower Topics hide Denominator adjustment – The reverse treasury share method Denominator adjustment – The reverse treasury share method IAS 33 prescribes a specific method, commonly referred to as the ‘reverse treasury share method’, for determining the dilutive effect of written puts and forwards. This method is similar to the … Read more

Convertible instruments in EPS calculations

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Convertible instruments in EPS calculations Convertible instruments are instruments other than stand-alone options that by their terms may be converted in whole or in part into the ordinary shares of an entity, such as convertible bonds or convertible preference shares. If these instruments fall in the scope of IAS 32 Financial Instruments: Presentation, then they … Read more

Preference shares in EPS Calculations

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Preference shares in EPS Calculations Preference shares may in accordance with IAS 32 Financial Instruments: Presentation be classified as a whole or by their component parts into a financial liability and/or an equity instrument, depending on their terms. They may be convertible into ordinary shares. An entity needs to consider whether equity-classified preference shares are … Read more

Contingently issuable ordinary shares for IAS 33 EPS

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Topics hide Contingently issuable ordinary shares EPS implications Dilutive or anti-dilutive? How to apply the test for different conditions in a contingent share agreement Contingencies related to price levels Contingencies related to earnings targets and price levels Other contingencies Case – Contingently issuable ordinary shares Workings Contingently issuable ordinary shares For EPS purposes, contingently issuable … Read more

Contracts settled in shares or cash for IAS 33 EPS calculations

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Topics hide Contracts settled in shares or cash EPS implications Which party holds the settlement choice? – If the entity has the settlement choice – If the counterparty has the settlement choice Case – Convertible bond – Entity has the settlement choice Workings Case – Share-based payment – Counterparty has the settlement choice Workings Contracts … Read more

IAS 33 Convertible bonds at issuer’s options

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Topics hide IAS 33 Earnings per Share IAS 33 Convertible bonds at issuer’s options IAS 33 Earnings per Share IAS 33 Convertible bonds at issuer’s options Example 8 Convertible bonds settled in shares or cash at the issuer’s options Reference: IAS 33, paragraphs 31-33, 36, 58 and 59 An entity issues 2,000 convertible bonds at … Read more

IFRS 2 Share-based payments and cash alternatives

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Topics hide IFRS 2 Share-based Payment IFRS 2 Share-based payments and cash alternatives IFRS 2 Share-based Payment IFRS 2 Share-based payments and cash alternatives Share-based payment transactions with cash alternatives 34 For share-based payment transactions in which the terms of the arrangement provide either the entity or the counterparty with the choice of whether the … Read more

Options in EPS Calculations in IAS 33

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Topics hide Options in EPS Calculations, warrants and their equivalents EPS implications Dilutive or anti-dilutive? Denominator adjustment for options – The treasury share method Assumed proceeds Average market price of ordinary shares Exercise price settled (or partially settled) by other instruments Proceeds used to redeem other instruments Case – Options settled gross in shares Workings … Read more

Contingently issuable POSs

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Topics hide Contingently issuable POSs EPS implications Dilutive or anti-dilutive? Case – Contingently issuable POSs Workings – Year 1 Workings – Year 2 Contingently issuable POSs Contingently issuable POSs are not specifically defined in IAS 33, but they are closely related to contingently issuable ordinary shares (see 5.10.10–80). These are POSs that are issuable for … Read more