Annual Reporting Posts

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 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

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

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

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

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

Topics hide Unvested ordinary shares (and ordinary shares subject to recall) EPS implications Dilutive or anti-dilutive? Case – Unvested ordinary shares – Without dividend entitlement Workings Case – Unvested ordinary shares – With dividend entitlement Workings Year 1 Unvested ordinary shares (and ordinary shares subject to recall) Unvested shares are commonly granted in exchange for … Read more