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Thread: 21 - Indian Accounting Standard (Ind AS) 33 - Earlier Accounting standard - (20) - Earnings per Share

  1. #41
    IND-AS
    Guest

    Thumbs up Example - 11 - Participating equity instruments and two-class ordinary shares of Indian Accounting Standard (Ind AS) 33

    Example - 11 - Participating equity instruments and two-class ordinary shares of Indian Accounting Standard (Ind AS) 33 - Earlier Accounting standard - (20)

    Earnings per Share

    Appendix - B

    Illustrative examples


    Example - 11 - Participating equity instruments and two-class ordinary shares*

    Reference: Ind AS 33, paragraphs A13 and A14
    Profit attributable to equity holders of the parent entity
    Rs. 100,000
    Ordinary shares outstanding
    10,000
    Non-convertible preference shares
    6,000
    Non-cumulative annual dividend on preference shares
    (before any dividend is paid on ordinary shares)
    Rs. 5.50 per share

    After ordinary shares have been paid a dividend of Rs. 2.10 per share, the preference shares participate in any additional dividends on a 20:80 ratio with ordinary shares (ie after preference and ordinary shares have been paid dividends of Rs. 5.50 and Rs. 2.10 per share, respectively, preference shares participate in any additional dividends at a rate of one-fourth of the amount paid to ordinary shares on a per-share basis).

    Dividends on preference shares paid
    Rs. 33,000
    (Rs. 5.50 pershare)
    Dividends on ordinary shares paid
    Rs. 21,000
    (Rs. 2.10 per share)
    Basic earnings per share is calculated as follows:
    Rs.
    Rs.
    Profit attributable to equity holders of the parent entity Less dividends paid:

    100,000
    Preference
    33,000

    Ordinary
    21,00
    (54,000)
    Undistributed earnings

    46,000

    Allocation of undistributed earnings:

    Allocation per ordinary share
    A
    Allocation per preference share
    B; B = ¼ A

    (A × 10,000) + (¼ × A × 6,000) = Rs. 46,000
    A = Rs. 46,000 ÷ (10,000 + 1,500)
    A = Rs. 4.00
    B = ¼ A
    B = Rs. 1.00


    Basic per share amounts:

    Preference Shares
    Ordinary Shares
    Distributed earnings
    Rs. 5.50
    Rs. 2.10
    Undistributed earnings
    Rs. 1.00
    Rs. 4.00
    Totals
    Rs. 6.50
    Rs. 6.10

    Note-
    *
    This example does not illustrate the classification of the components of convertible financial instruments as liabilities and equity or the classification of related interest and dividends as expenses and equity as required by Ind AS 32.


  2. #42
    IND-AS
    Guest

    Thumbs up Example - 12 - Calculation and presentation of basic and diluted earnings per share of Indian Accounting Standard (Ind AS) 33

    Example - 12 - Calculation and presentation of basic and diluted earnings per share of Indian Accounting Standard (Ind AS) 33 - Earlier Accounting standard - (20)

    Earnings per Share

    Appendix - B

    Illustrative examples


    Example - 12 - Calculation and presentation of basic and diluted earnings per share (comprehensive example)


    This example illustrates the quarterly and annual calculations of basic and diluted earnings per share in the year 20X1 for Company A, which has a complex capital structure. The control number is profit or loss from continuing operations attributable to the parent entity.


    For Full Detail You can download this from PDF Format


    Attached Files Attached Files

  3. #43
    IND-AS
    Guest

    Thumbs up Appendix - 1 of Indian Accounting Standard (Ind AS) 33 - Earlier Accounting standard - (20) - Earnings per Share

    Appendix - 1 of Indian Accounting Standard (Ind AS) 33 - Earlier Accounting standard - (20)

    Earnings per Share



    Appendix - 1

    Note:
    This Appendix is not a part of the Indian Accounting Standard. The purpose of this Appendix is only to bring out the differences between Indian Accounting Standard (Ind AS) 33 and the corresponding International Accounting Standard (IAS) 33, Earnings per Share.

    Comparison with IAS 33, Earnings per Share

    1. IAS 33 provides that when an entity presents both consolidated financial statements and separate financial statements, it may give EPS related information in consolidated financial statements only, whereas, the Ind AS 33 requires EPS related information to be disclosed both in consolidated financial statements and separate financial statements.

    2. Different terminology is used, as used in existing laws e.g., the term ‘Statement of profit and loss’ is used instead of ‘Statement of comprehensive income’. The words ‘approval of the financial statements for issue’ have been used instead of ‘authorisation of the financial statements for issue’ in the context of financial statements considered for the purpose of events after the reporting period.

    3. Paragraph 2 of IAS 33 requires that the entire standard applies to :

    (a) the separate or individual financial statements of an entity:

    (i) whose ordinary shares or potential ordinary shares are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets) or
    (ii) that files, or is in the process of filing, its financial statements with a Securities Regulator or other regulatory organisation for the purpose of issuing ordinary shares in a public market; and

    (b) the consolidated financial statements of a group with a parent:

    (i) whose ordinary shares or potential ordinary shares are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets) or
    (ii) that files, or is in the process of filing, its financial statements with a Securities Regulator or other regulatory organisation for the purpose of issuing ordinary shares in a public market..

    It also requires that an entity that discloses earnings per share shall calculate and disclose earnings per share in accordance with this Standard .

    The above have been deleted in the Ind AS as the applicability or exemptions to the Indian Accounting Standards is governed by the Companies Act and the Rules made thereunder. However, the paragraph number has been retained in Ind AS 33 to maintain consistency with paragraph numbers of IAS 33.

    4. Paragraph 4 has been modified in Ind AS 33 to clarify that an entity shall not present in separate financial statements, earnings per share based on the information given in consolidated financial statements, besides requiring as in IAS 33, that earnings per share based on the information given in separate financial statements shall not be presented in the consolidated financial statements.

    5. In Ind AS 33, a paragraph has been added after paragraph 12 on the following lines -
    “Where any item of income or expense which is otherwise required to be recognized in profit or loss in accordance with accounting standards is debited or credited to securities premium account/other reserves, the amount in respect thereof shall be deducted from profit or loss from continuing operations for the purpose of calculating basic earnings per share.”

    6. In Ind 33 paragraph 15 has been amended by adding the phrase, ‘irrespective of whether such discount or premium is debited or credited to securities premium account’ to further clarify that such discount or premium shall also be amortised to retained earnings.

    7. Requirements regarding disclosure of amounts per share using a reported component, basic and diluted earnings per share and basic and diluted earnings per share for discontinued operations in the separate income statement, where separate income statement is presented under following paragraphs of IAS 33 have been deleted:

    (i) paragraph 4A
    (ii) paragraph 67A
    (iii) paragraph 68A
    (iv) paragraph 73A

    This change is consequential to the removal of option regarding the two statement approach in Ind AS 1. Ind AS 1 only requires that the components of profit or loss and components of other comprehensive income shall be presented as a part of the statement of profit and loss. However, paragraph numbers have been retained in Ind AS 33 to maintain consistency with paragraph numbers of IAS 33.

    Paragraph number 25 appears as ‘Deleted ‘in IAS 33. In order to maintain consistency with paragraph numbers of IAS 33, the paragraph number is retained in Ind AS 33:


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