Preference shares in EPS Calculations

by

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

by

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

by

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

by

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

by

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

by

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

by

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

Unvested ordinary shares

by

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

Performance condition

by

A vesting condition that requires: the counterparty to complete a specified period of service (ie a service condition); the service requirement can be explicit or implicit; and specified performance target(s) to be met while the counterparty is rendering the service required in (a). The period of achieving the performance target(s): shall not extend beyond the … Read more

EPS Impact of share-based payments

by

Topics hide EPS Impact of share-based payments 1. IFRS 2 Settlement alternatives 1.1 Equity-settled share-based payments 1.2 Cash-settled share-based payments 1.3 Share-based payment arrangements with the option to settle in ordinary shares or cash 2 Vesting conditions EPS Impact of share-based payments Because share-based payments are common and they impact EPS, it is important to … Read more