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Thread: Accounting Standard (AS) 20 - Earnings Per Share

  1. #1
    Accounting Standards
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    Default Accounting Standard (AS) 20 - Earnings Per Share

    Accounting Standard (AS) 20
    (issued 2001)
    Earnings Per Share
    (This Accounting Standard includes paragraphs set in
    bold italic type
    and plain type, which have equal authority. Paragraphs in bold italic
    type indicate the main principles. This Accounting Standard should
    be read in the context of its objective and the Preface to the Statements
    of Accounting Standards
    1 .)

    Accounting Standard (AS) 20,
    ‘Earnings Per Share’, issued by the Council
    of the Institute of Chartered Accountants of India, comes into effect in
    respect of accounting periods commencing on or after 1-4-2001 and is
    mandatory in nature
    2 from that date, in respect of enterprises whose
    equity shares or potential equity shares are listed on a recognised stock
    exchange in India.
    An enterprise which has neither equity shares nor potential equity shares
    which are so listed butwhich discloses earnings per share, should calculate
    and disclose earnings per share in accordance with this Standard from
    the aforesaid date
    3 . However, in respect of accounting periods commencing
    on or after 1-4-2004, if any such enterprise does not fall in any of the
    following categories, it need not disclose diluted earnings per share (both
    including and excluding extraordinary items) and information required by

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  2. #2
    Accounting Standards
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    Thumbs up Accounting Standards Interpretation (ASI) 12 Applicability of AS 20

    Accounting Standards Interpretation (ASI) 12

    Applicability of AS 20

    Accounting Standard (AS) 20, Earnings Per Share
    [Pursuant to the issuance of this Accounting Standards Interpretation,
    General Clarification (GC)
    1/2002, issued in March 2002 stands
    withdrawn.]

    ISSUE
    1. Whether companies which are required to give information under Part
    IVof ScheduleVI to theCompaniesAct, 1956, should calculate and disclose
    earnings per share in accordance with AS 20.
    CONSENSUS
    2. Every company, which is required to give information under Part IVof
    ScheduleVI to theCompaniesAct, 1956, should calculate and disclose earnings
    per share in accordance with AS 20, whether or not its equity shares or
    potential equity shares are listed on a recognised stock exchange in India.
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  3. #3
    Accounting Standards
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    Thumbs up CLARIFICATION Applicability of Accounting Standard (AS) 20 Earnings Per Share

    CLARIFICATION

    Applicability of Accounting Standard (AS) 20,
    Earnings Per Share

    Accounting Standard (AS) 20, 'Earnings Per Share', issued by the Council of the Institute of Chartered Accountants of India, has come into effect in respect of accounting periods commencing on or after 1-4-2001 and is mandatory in nature, from that date, in respect of enterprises whose equity shares or potential equity shares are listed on a recognised stock exchange in India.


    AS 20 does not mandate an enterprise, which has neither equity shares nor potential equity shares which are so listed, to calculate and disclose earnings per share, but, if that enterprise discloses earnings per share for complying with the requirements of any statute or otherwise, it should calculate and disclose earnings per share in accordance with AS 20.


    Part IV of the Schedule VI to the Companies Act, 1956, requires, among other things, disclosure of earnings per share.


    Accordingly, it is hereby clarified that every company, which is required to give information under Part IV of the Schedule VI to the Companies Act, 1956, should calculate and disclose earnings per share in accordance with AS 20, whether its equity shares or potential equity shares are listed on a recognised stock exchange in India or not.


  4. #4
    Accounting Standards
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    Thumbs up General Clarification (GC) - 10/2002 AS 20 on Disclosure of Earnings Per Share figures in case of Extraordinary Items

    General Clarification (GC) - 10/2002
    Accounting Standard (AS) 20, Earnings Per Share
    Disclosure of Earnings Per Share figures in case of Extraordinary Items

    The following is the General Clarification (GC) - 10/2002, issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, on AS 20, Earnings Per Share:

    AS 20 requires presentation of basic and diluted earnings per share figures computed on the basis of earnings including extraordinary items.

    Paragraphs 50 and 51 of AS 20 provide as under:
    • "50. If an enterprise discloses, in addition to basic and diluted earnings per share, per share amounts using a reported component of net profit other than net profit or loss for the period attributable to equity shareholders, such amounts should be calculated using the weighted average number of equity shares determined in accordance with this Statement. If a component of net profit is used which is not reported as a line item in the statement of profit and loss, a reconciliation should be provided between the component used and a line item which is reported in the statement of profit and loss. Basic and diluted per share amounts should be disclosed with equal prominence.

      51. An enterprise may wish to disclose more information than this Statement requires. Such information may help the users to evaluate the performance of the enterprise and may take the form of per share amounts for various components of net profit, e.g., profit from ordinary activities. Such disclosures are encouraged. However, when such amounts are disclosed, the denominators need to be calculated in accordance with this Statement in order to ensure the comparability of the per share amounts disclosed."
    In view of paragraphs 50 and 51 above, where an enterprise's statement of profit and loss includes extraordinary items (within the meaning of AS 5, Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies), it is recommended that the following may also be presented, with appropriate description, on the face of the statement of profit and loss:
    1. Basic earnings per share computed on the basis of earnings excluding extraordinary items (net of tax expense).

    2. Diluted earnings per share computed on the basis of earnings excluding extraordinary items (net of tax expense).

  5. #5
    Accounting Standards
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    Post

    Exposure Draft
    Accounting Standard (AS) 20 (Revised 20XX)
    (Corresponding to IAS 33)
    Following is the Exposure Draft of the Accounting Standard (AS) 20 (Revised 20XX), Earnings per Share, issued by the Accounting Standards Board of the Institute of Chartered Accountants
    of India, for comments.
    This Exposure Draft of the revised Accounting Standard includes paragraphs set in
    bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles. This Exposure Draft of the revised Accounting Standard should be read in the context of its objective and the Preface to the Statements of Accounting Standards.

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