Rajesh Kevin Sanjay

Earning Per Share

IAS 33

History

Objectives

Scope

Requirement for E.P.S

Terms Used in E.P.S

Disclosure

Meaning of E.P.S

Benefits of E.P.S

Types of E.P.S

Overview

Company’s earning

Common Stock allocation

Profitability

Earning Per Share

For example,

Assume that a company has a net income of $25 million. If the company pays out $1 million in preferred dividends and has 10 million shares for half of the year and 15 million shares for the other half, the EPS would be $1.92).

E.P.S=

E.P.S

Solution:First, the $1 million is deducted from the net income to get $24 million, then a weighted average is taken to find the number of shares outstanding (0.5 x 10M+ 0.5 x 15M = 12.5M). Average Outstanding shares

=

=$12.5m

E.P.S =

=1.92

E.P.S=

E.P.S

Calculation of Income

Time Series

Earning vs. Dividends

Advantages/ Benefits of E.P.S

Basic Earning Per Share

Diluted Earning Per Share

Types of E.P.S

January 1996 Exposure Draft E33 Earnings Per Share

February 1997 IAS 33 Earnings Per Share

1 January 1999 Effective date of IAS 33 (1997)

18 December 2003 Revised version of IAS 33 issued by the IASB

1 January 2005 Effective date of IAS 33 (Revised 2003)

7 August 2008 IASB proposes to amend IAS 33.

1 January 2009Effective date of consequential amendments arising from IAS 1 (2007)

History of IAS 33

Prescribe Principles and

Presentation of E.P.S

Improve Performance Comparison

Objective

This Standard shall apply to:

the separate or individual financial statements of an entity:whose ordinary shares or potential ordinary shares are traded in

a public market or, that files, or is in the process of filing, its financial statements

with a securities commission or other regulatory organisation for the purpose of issuing ordinary shares in a public market; and

Scope

The consolidated financial statements of a group with a parent:

whose ordinary shares or potential ordinary shares are traded in a public market local and regional markets) or

that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing ordinary shares in a public market.

Scope

Profit or loss from continuing operations attributable to the ordinary equity holders of the parent entity,

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.

Requirement to Present E.P.S

Antidilution

A contingent share agreement

Contingently issuable ordinary shares

Dilution

Options, warrants and their equivalents

Terms Used in IAS 33

An ordinary share

A potential ordinary share

Put options on ordinary shares

Terms Used Cont’d

Disclosure

Disclosure in the notes

Discontinued operations

Reconciliations Adjusted

IAS 34 : Interim Financial Reporting

Questions & Discussion