IFRS Conversion of comparative data on earnings per share

IFRS Conversion of comparative data on earnings per share:The objective of IAS 33 is to prescribe principles for determining and presenting earnings per share (EPS) amounts to improve performance comparisons between different entities in the same reporting period and between different reporting periods for the same entity.

IFRS Conversion of comparative data on earnings per share: Scope

Ias 33 is mainly for whole securities which are publicly traded  or which you can say  are processed of issuing securities to the public. There are other entities which are choose to present EPS information also must comply with IAS 33.

Some Basic Formulas

In a single report both parent and consolidate report should be present if that is so than, EPS is required only for the consolidated statements.

IFRS Calculation of earnings per share in accordance with IAS 33

EPS is calculated as:

EPS = net income ÷ average outstanding common shares

Basic EPS = Income Available to Common/Weighted-Average Number of Common Shares Outstanding.

IFRS Conversion of comparative data on earnings per share

Key definitions

Shares which are common or  common stock are normally called as ordinary share. An equity instrument that is subordinate to all other classes of equity instruments.

Potential ordinary share: a financial instrument or other contract that may entitle its holder to ordinary shares.

IFRS Conversion of comparative data on earnings per share: History of IAS 33

It is issued at 1 January 2012. Includes IFRSs with an effective date after 1 January 2012 but not the IFRSs they will replace. This extract has been prepared by IFRS Foundation staff and has not been approved by the IASB. For the requirements reference must be made to International Financial Reporting Standards.IFRS Conversion of comparative data on earnings per share

IFRS Conversion of comparative data on earnings per share

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. The focus of this Standard is on the denominator of the earnings per share calculation. This Standard shall be applied by entities whose ordinary shares or potential ordinary shares are publicly traded and by entities that are in the process of issuing ordinary shares or potential ordinary shares in public markets. An entity that discloses earnings per share shall calculate and disclose earnings per share in accordance with this Standard. An ordinary share is an equity instrument that is subordinate to all other classes of equity instruments.

IFRS Conversion of comparative data on earnings per share

A potential ordinary share is a financial instrument or other contract that may entitle its holder to ordinary shares. 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. An entity that reports a discontinued operation shall disclose the basic and diluted amounts per share for the discontinued operation either in the statement of comprehensive income or in the notes.

IFRS Conversion of comparative data on earnings per share

Basic earnings per share 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 during the period.

For the purpose of calculating basic earnings per share, the amounts attributable to ordinary equity holders of the parent entity in respect of:

1. Profit or loss from continuing operations attributable to the parent entity.
2. Profit or loss attributable to the parent entity shall be the amounts in (a) and (b) adjusted for the after-tax amounts of preference dividends, differences arising on the settlement of preference shares, and other similar effects of preference shares classified as equity. For the purpose of calculating basic earnings per share, the number of ordinary shares shall be the weighted average number of ordinary shares outstanding during the period.

IFRS Conversion of comparative data on earnings per share

The weighted average number of ordinary shares outstanding during the period and for all periods presented shall be adjusted for events, other than the conversion of potential ordinary shares, that have changed the number of ordinary shares outstanding without a corresponding change in resources.

Diluted earnings per share For the purpose of calculating diluted earnings per share, an entity shall adjust profit or loss attributable to ordinary equity holders of the parent entity, and the weighted average number of shares outstanding, for the effects of all dilute potential ordinary shares. Dilution is a reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions.

For the purpose of calculating diluted earnings per share, the number of ordinary shares shall be the weighted average number of ordinary shares calculated in accordance with paragraphs 19 and 26, plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. Potential ordinary shares shall be treated as dilutive when, and only when, their conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing operations.

An entity uses profit or loss from continuing operations attributable to the parent entity as the control number to establish whether potential ordinary shares are dilute or anti dilute. In determining whether potential ordinary shares are dilute or anti-dilute, each issue or series of potential ordinary shares is considered separately rather than in aggregate.

Retrospective adjustments 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.

IFRS Conversion of comparative data on earnings per share

Cakart.in provides India’s top IFRS faculty video classes – online & in Pen Drive/ DVD – at very cost effective rates. Get IFRS Video classes from www.cakart.in to do a great preparation for primary Student.