Chapter 2 - EPS - IAS 33 - 2 - Basic EPS
Chapter 2 - EPS - IAS 33 - 2 - Basic EPS
Content
1. Introduction
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Basic EPS
Calculating Basic EPS for Various Scenarios
Basic EPS
Numerator:
• After deducting amounts due to preference shareholders in respect of:
– Preference dividends (lưu ý PP hạch toán cổ tức ưu đãi)
– Gains/losses arising on the repurchase or early conversion of preference
shares –(standard PS vs convertible PS)
– Amortization of discount or premium on increasing rate preference
shares
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(b
8 Year Carrying amount Imputed (a) Carrying amount of ) Dividend
of dividend class A preference paid
class A preference shares 31 December
shares 1 January
20X1 81.63 5.71 87.34 –
20X2 87.34 6.12 93.46 –
20X3 93.46 6.54 100.00 –
Thereafter: 100.00 7.00 107.00 (7.00)
(a) at 7%
(b) This is before dividend payment.
1/1/X1 31/12/X1 31/12/X2 31/12/X3 31/12/X4
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(i) -> tăng tiền/nguồn lực cho DN/ảnh hưởng đến P/L
-> Thời điểm-> tính trọng số
(ii) Không tăng tiền/nguồn lực -> không tính trọng số/ hồi tố
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1. ordinary shares issued in exchange for cash are included when cash is
receivable;
2. ordinary shares issued on the voluntary reinvestment of dividends on ordinary
or preference shares are included when dividends are reinvested;
3. ordinary shares issued as a result of the conversion of a debt instrument to
ordinary shares are included from the date that interest ceases to accrue;
4. ordinary shares issued in place of interest or principal on other financial
instruments are included from the date that interest ceases to accrue;
5. ordinary shares issued in exchange for the settlement of a liability of the entity
are included from the settlement date;
6. ordinary shares issued as consideration for the acquisition of an asset other
than cash are included as of the date on which the acquisition is recognised; and
7. ordinary shares issued for the rendering of services to the entity are included
as the services are rendered.
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$800,000
Basic EPS =
(5,000,000 x ½) + (8,000,000 x ½)
= 5,000,000 + (3,000,000 x ½)
= 12.3 cents
16 Thu Hien -20
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• Treatment:
– Any bonus issues taking place in a period are assumed to be issued
at the beginning of the period. (no time-weighting)
– Retroactively restate previous year’s EPS comparatives based on
new number of shares.
20x4 20x3
²$2,000,000/10,000,000
Basic EPS (cents) 17.33¹ 20²
³$2,000,000/15,000,000 With retroactive restatement to 20x3 comparative figure:
20x4 20x3 (restated)
Basic EPS (cents) 17.33¹ 13.33³
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Scenario 3 &4:
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• The market price immediately before the exercise of rights issue was $3.00
• If the issue was made at full market price, only 2,500,000 new shares
needed to be issued ($7,500,000/$3)
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10.000.000 OS
10.000.000 OS
5.000.0000 OS:
10 mil *0,2 = 2 mil (Bonus) : 2,5 mil -> bonus S -> Retro
Earnings increase
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• One contract was secured on 1 June 20x5 and another on 1 Dec 20x5
• There had been no issue of new ordinary shares during the year
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• IAS 32:33: The entity that reacquires its own equity instruments should
deduct these instruments (“treasury shares”) from equity. No gain or
loss is recognized in P/L.
• For shares repurchased and held since the beginning of the previous
financial year, they should not be included in the weighted average
number of ordinary shares for both prior and current period.
30 September
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X5
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