IAS 33 Earnings per share

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. This narrative builds on the basic principles introduced in EPS or earnings per share, and … Read more

EPS Impact of share-based payments Because share-based payments are common and they impact EPS, it is important to understand how IFRS 2 interacts with IAS 33. Accordingly, this narrative starts with an alternative IFRS 2 perspective and discusses the EPS implications of each type of arrangement under IFRS 2. This narrative builds on the basic … Read more

Topics hide Ordinary shares issued and EPS Ordinary shares issued to settle liabilities EPS implications Case – Ordinary shares issued to settle liabilities Ordinary shares issued to acquire assets EPS implications Case – Ordinary shares issued to acquire an asset Ordinary shares issued to acquire a business EPS implications Contingent consideration Acquisitions of associates and … Read more

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

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