Reference: IAS 33, paragraphs 12 and 15

Entity D issued non‑convertible, non‑redeemable class A cumulative preference shares of CU100 par value on 1 January 20X1. The class A preference shares are entitled to a cumulative annual dividend of CU7 per share starting in 20X4.

At the time of issue, the market rate dividend yield on the class A preference shares was 7 per cent a year. Thus, Entity D could have expected to receive proceeds of approximately CU100 per class A preference share if the dividend rate of CU7 per share had been in effect at the date of issue.

In consideration of the dividend payment terms, however, the class A preference shares were issued at CU81.63 per share, ie at a discount of CU18.37 per share. The issue price can be calculated by taking the present value of CU100, discounted at 7 per cent over a three‑year period.

Because the shares are classified as equity, the original issue discount is amortised to retained earnings using the effective interest method [Refer:IFRS 9 Appendix A (definition of effective interest method) and paragraphs B5.4.1⁠–⁠B5.4.7] and treated as a preference dividend for earnings per share purposes. To calculate basic earnings per share, the following imputed dividend per class A preference share is deducted to determine the profit or loss attributable to ordinary equity holders of the parent entity: [Link toparagraphs 12⁠–⁠18, A1, A13 and A14]

Year	Carrying amount of class A preference shares 1 January	Imputed(a) dividend	Carrying(b) amount of class A preference shares 31 December	Dividend paid
	CU	CU	CU	CU
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.

Reference: IAS 33, paragraphs 19⁠–⁠21

		Shares issued	Treasury(a) shares			Shares outstanding
1 January 20X1	Balance at beginning of year	2,000		300		1,700
31 May 20X1	Issue of new shares for cash	800		–		2,500
1 December 20X1	Purchase of treasury shares for cash	–		250		2,250
31 December 20X1	Balance at year-end	2,800		550		2,250
Calculation of weighted average:
(1,700 × 5/12) + (2,500 × 6/12) + (2,250 × 1/12) = 2,146 shares or
(1,700 × 12/12) + (800 × 7/12) – (250 × 1/12) = 2,146 shares
(a) Treasury shares are equity instruments reacquired and held by the issuing entity itself or by its subsidiaries.

Reference: IAS 33, paragraphs 26, 27(a) and 28

Profit attributable to ordinary equity holders of the parent entity 20X0			CU180
Profit attributable to ordinary equity holders of the parent entity 20X1			CU600
Ordinary shares outstanding until 30 September 20X1			200
Bonus issue 1 October 20X1	2 ordinary shares for each ordinary share outstanding at 30 September 20X1
	200 × 2 = 400
Basic earnings per share 20X1	CU600	= CU1.00
	(200 + 400)
Basic earnings per share 20X0	CU180	= CU0.30
	(200 + 400)
Because the bonus issue was without consideration, it is treated as if it had occurred before the beginning of 20X0, the earliest period presented.

Reference: IAS 33, paragraphs 26, 27(b) and A2

			20X0		20X1		20X2
Profit attributable to ordinary equity holders of the parent entity			CU1,100		CU1,500		CU1,800
Shares outstanding before rights issue	500 shares
Rights issue	One new share for each five outstanding shares
	(100 new shares total)
	Exercise price: CU5.00
	Date of rights issue: 1 January 20X1
	Last date to exercise rights: 1 March 20X1
Market price of one ordinary share immediately before exercise on 1 March 20X1:	CU11.00
Reporting date	31 December
Calculation of theoretical ex-rights value per share
Fair value of all outstanding shares before the exercise of rights + total amount received from exercise of rights
Number of shares outstanding before exercise + number of shares issued in the exercise
	(CU11.00 × 500 shares) + (CU5.00 × 100 shares)
	500 shares + 100 shares
Theoretical ex-rights value per share = CU10.00
Calculation of adjustment factor
Fair value per share before exercise of rights					CU11.00		= 1.10
Theoretical ex-rights value per share					CU10.00
Calculation of basic earnings per share
			20X0		20X1		20X2
20X0 basic EPS as originally reported:		CU1,100 ÷ 500 shares	CU2.20
20X0 basic EPS restated for rights issue:		CU1,100
		(500 shares × 1.1)	CU2.00
20X1 basic EPS including effects of rights issue:		CU1,500
		(500 × 1.1 × 2/12) + (600 × 10/12)			CU2.54
20X2 basic EPS:		CU1,800 ÷ 600 shares					CU3.00

Reference: IAS 33, paragraphs 45⁠–⁠47

Profit attributable to ordinary equity holders of the parent entity for year 20X1	CU1,200,000
Weighted average number of ordinary shares outstanding during year 20X1	500,000 shares
Average market price of one ordinary share during year 20X1	CU20.00
Weighted average number of shares under option during year 20X1	100,000 shares
Exercise price for shares under option during year 20X1	CU15.00
Calculation of earnings per share
	Earnings	Shares	Per share
Profit attributable to ordinary equity holders of the parent entity for year 20X1	CU1,200,000
Weighted average shares outstanding during year 20X1		500,000
Basic earnings per share			CU2.40
Weighted average number of shares under option		100,000
Weighted average number of shares that would have been issued at average market price: (100,000 × CU15.00) ÷ CU20.00	(a)	(75,000)
Diluted earnings per share	CU1,200,000	525,000	CU2.29
(a) Earnings have not increased because the total number of shares has increased only by the number of shares (25,000) deemed to have been issued for no consideration (see paragraph 46(b) of the Standard).

Weighted average number of unvested share options per employee	1,000
Weighted average amount per employee to be recognised over the remainder of the vesting period for employee services to be rendered as consideration for the share options, determined in accordance with IFRS 2 Share-based Payment	CU1,200
Cash exercise price of unvested share options	CU15
Calculation of adjusted exercise price
Fair value of services yet to be rendered per employee:	CU1,200
Fair value of services yet to be rendered per option: (CU1,200 ÷ 1,000)	CU1.20
Total exercise price of share options: (CU15.00 + CU1.20)	CU16.20

Reference: IAS 33, paragraphs 33, 34, 36 and 49

Profit attributable to ordinary equity holders of the parent entity			CU1,004
Ordinary shares outstanding			1,000
Basic earnings per share			CU1.00
Convertible bonds			100
Each block of 10 bonds is convertible into three ordinary shares
Interest expense for the current year relating to the liability component of the convertible bonds			CU10
Current and deferred tax relating to that interest expense			CU4
Note: the interest expense includes amortisation of the discount arising on initial recognition of the liability component (see IAS 32 Financial Instruments: Presentation).
Adjusted profit attributable to ordinary equity holders of the parent entity	CU1,004 + CU10 – CU4
	= CU1,010
Number of ordinary shares resulting from conversion of bonds			30
Number of ordinary shares used to calculate diluted earnings per share	1,000 + 30 = 1,030
Diluted earnings per share	CU1,010		= CU0.98
	1,030

Reference: IAS 33, paragraphs 19, 24, 36, 37, 41⁠–⁠43 and 52

Ordinary shares outstanding during 20X1	1,000,000 (there were no options, warrants or convertible instruments outstanding during the period)
An agreement related to a recent business combination provides for the issue of additional ordinary shares based on the following conditions:
	5,000 additional ordinary shares for each new retail site opened during 20X1
	1,000 additional ordinary shares for each CU1,000 of consolidated profit in excess of CU2,000,000 for the year ended 31 December 20X1
Retail sites opened during the year:	one on 1 May 20X1
	one on 1 September 20X1
Consolidated year-to-date profit attributable to ordinary equity holders of the parent entity:	CU1,100,000 as of 31 March 20X1
	CU2,300,000 as of 30 June 20X1
	CU1,900,000 as of 30 September 20X1 (including a CU450,000 loss from a discontinued operation)
	CU2,900,000 as of 31 December 20X1

Basic earnings per share
	First quarter		Second quarter		Third quarter		Fourth quarter		Full year
Numerator (CU)	1,100,000		1,200,000		(400,000)		1,000,000		2,900,000
Denominator:
Ordinary shares outstanding	1,000,000		1,000,000		1,000,000		1,000,000		1,000,000
Retail site contingency	–		3,333(a)		6,667(b)		10,000		5,000(c)
Earnings contingency(d)	–		–		–		–		–
Total shares	1,000,000		1,003,333		1,006,667		1,010,000		1,005,000
Basic earnings per share (CU)	1.10		1.20		(0.40)		0.99		2.89
(a) 5,000 shares × 2/3 (b) 5,000 shares + (5,000 shares × 1/3) (c) (5,000 shares × 8/12) + (5,000 shares × 4/12) (d) The earnings contingency has no effect on basic earnings per share because it is not certain that the condition is satisfied until the end of the contingency period. The effect is negligible for the fourth‑quarter and full‑year calculations because it is not certain that the condition is met until the last day of the period.

Diluted earnings per share
	First quarter		Second quarter		Third quarter		Fourth quarter		Full year
Numerator (CU)	1,100,000		1,200,000		(400,000)		1,000,000		2,900,000
Denominator:
Ordinary shares outstanding	1,000,000		1,000,000		1,000,000		1,000,000		1,000,000
Retail site contingency	–		5,000		10,000		10,000		10,000
Earnings contingency	–(a)		300,000(b)		–(c)		900,000(d)		900,000(d)
Total shares	1,000,000		1,305,000		1,010,000		1,910,000		1,910,000
Diluted earnings per share (CU)	1.10		0.92		(0.40)(e)		0.52		1.52
(a) Company A does not have year-to-date profit exceeding CU2,000,000 at 31 March 20X1. The Standard does not permit projecting future earnings levels and including the related contingent shares. (b) [(CU2,300,000 – CU2,000,000) ÷ 1,000] × 1,000 shares = 300,000 shares. (c) Year-to-date profit is less than CU2,000,000. (d) [(CU2,900,000 – CU2,000,000) ÷ 1,000] × 1,000 shares = 900,000 shares. (e) Because the loss during the third quarter is attributable to a loss from a discontinued operation, the antidilution rules do not apply. The control number (ie profit or loss from, continuing operations attributable to the equity holders of the parent entity) is positive. Accordingly, the effect of potential ordinary shares is included in the calculation of diluted earnings per share.

Reference: IAS 33, paragraphs 31⁠–⁠33, 36, 58 and 59

An entity issues 2,000 convertible bonds at the beginning of Year 1. The bonds have a three-year term, and are issued at par with a face value of CU1,000 per bond, giving total proceeds of CU2,000,000. Interest is payable annually in arrears at a nominal annual interest rate of 6 per cent. Each bond is convertible at any time up to maturity into 250 ordinary shares. The entity has an option to settle the principal amount of the convertible bonds in ordinary shares or in cash.

When the bonds are issued, the prevailing market interest rate for similar debt without a conversion option is 9 per cent. At the issue date, the market price of one ordinary share is CU3. Income tax is ignored.

Profit attributable to ordinary equity holders of the parent entity Year 1	CU1,000,000
Ordinary shares outstanding	1,200,000
Convertible bonds outstanding	2,000
Allocation of proceeds of the bond issue:
Liability component	CU1,848,122(a)
Equity component	CU151,878
	CU2,000,000
(a) This represents the present value of the principal and interest discounted at 9% – CU2,000,000 payable at the end of three years; CU120,000 payable annually in arrears for three years.

The liability and equity components would be determined in accordance with IAS 32 Financial Instruments: Presentation. These amounts are recognised as the initial carrying amounts of the liability and equity components. The amount assigned to the issuer conversion option equity element is an addition to equity and is not adjusted.

Basic earnings per share Year 1:
CU1,000,000		= CU0.83 per ordinary share
1,200,000

Diluted earnings per share Year 1:

It is presumed that the issuer will settle the contract by the issue of ordinary shares. The dilutive effect is therefore calculated in accordance with paragraph 59 of the Standard.

CU1,000,000 + CU166,331(a)		= CU0.69 per ordinary share
1,200,000 + 500,000(b)
(a) Profit is adjusted for the accretion of CU166,331 (CU1,848,122 × 9%) of the liability because of the passage of time. (b) 500,000 ordinary shares = 250 ordinary shares × 2,000 convertible bonds

Primary reference: IAS 33, paragraph 44

Secondary reference: IAS 33, paragraphs 10, 12, 19, 31⁠–⁠33, 36, 41⁠–⁠47, 49 and 50

Earnings	CU
Profit from continuing operations attributable to the parent entity	16,400,000
Less dividends on preference shares	(6,400,000)
Profit from continuing operations attributable to ordinary equity holders of the parent entity	10,000,000
Loss from discontinued operations attributable to the parent entity	(4,000,000)
Profit attributable to ordinary equity holders of the parent entity	6,000,000
Ordinary shares outstanding	2,000,000
Average market price of one ordinary share during year	CU75.00

Reference: IAS 33, paragraphs 40, A11 and A12

Parent:
Profit attributable to ordinary equity holders of the parent entity	CU12,000 (excluding any earnings of, or dividends paid by, the subsidiary)
Ordinary shares outstanding	10,000
Instruments of subsidiary owned by the parent	800 ordinary shares
	30 warrants exercisable to purchase ordinary shares of subsidiary
	300 convertible preference shares
Subsidiary:
Profit	CU5,400
Ordinary shares outstanding	1,000
Warrants	150, exercisable to purchase ordinary shares of the subsidiary
Exercise price	CU10
Average market price of one ordinary share	CU20
Convertible preference shares	400, each convertible into one ordinary share
Dividends on preference shares	CU1 per share
No inter-company eliminations or adjustments were necessary except for dividends.
For the purposes of this illustration, income taxes have been ignored.

Subsidiary’s earnings per share
Basic EPS	CU5.00 calculated:	CU5,400(a) – CU400(b)
		1,000(c)
Diluted EPS	CU3.66 calculated:	CU5,400(d)
		(1,000 + 75(e) + 400(f))
(a) Subsidiary's profit attributable to ordinary equity holders. (b) Dividends paid by subsidiary on convertible preference shares. (c) Subsidiary's ordinary shares outstanding. (d) Subsidiary's profit attributable to ordinary equity holders (CU5,000) increased by CU400 preference dividends for the purpose of calculating diluted earnings per share. (e) Incremental shares from warrants, calculated: [(CU20 – CU10) ÷ CU20] × 150. (f) Subsidiary's ordinary shares assumed outstanding from conversion of convertible preference shares, calculated: 400 convertible preference shares × conversion factor of 1.

Consolidated earnings per share
Basic EPS	CU1.63 calculated:	CU12,000(a) + CU4,300(b)
		10,000(c)
Diluted EPS	CU1.61 calculated:	CU12,000 + CU2,928(d) + CU55(e) + CU1,098(f)
		10,000
(a) Parent's profit attributable to ordinary equity holders of the parent entity. (b) Portion of subsidiary’s profit to be included in consolidated basic earnings per share, calculated: (800 × CU5.00) + (300 × CU1.00). (c) Parent’s ordinary shares outstanding. (d) Parent’s proportionate interest in subsidiary’s earnings attributable to ordinary shares, calculated: (800 ÷ 1,000) × (1,000 shares × CU3.66 per share). (e) Parent’s proportionate interest in subsidiary’s earnings attributable to warrants, calculated: (30 ÷ 150) × (75 incremental shares × CU3.66 per share). (f) Parent’s proportionate interest in subsidiary’s earnings attributable to convertible preference shares, calculated: (300 ÷ 400) × (400 shares from conversion × CU3.66 per share).

Reference: IAS 33, paragraphs A13 and A14

Profit attributable to equity holders of the parent entity	CU100,000
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)	CU5.50 per share
After ordinary shares have been paid a dividend of CU2.10 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 CU5.50 and CU2.10 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			CU33,000		(CU5.50per share)
Dividends on ordinary shares paid			CU21,000		(CU2.10per share)
Basic earnings per share is calculated as follows:
			CU		CU
Profit attributable to equity holders of the parent entity					100,000
Less dividends paid:
Preference			33,000
Ordinary			21,000
					(54,000)
Undistributed earnings					46,000
Allocation of undistributed earnings:
Allocation per ordinary share = A
Allocation per preference share = B; B = 1/4 A
	(A × 10,000) + (1/4 × A × 6,000) = CU46,000
	A = CU46,000 ÷ (10,000 + 1,500)
	A = CU4.00
	B = 1/4 A
	B = CU1.00

Basic per share amounts:
Preferenceshares		Ordinaryshares
Distributed earnings	CU5.50		CU2.10
Undistributed earnings	CU1.00		CU4.00
Totals	CU6.50		CU6.10

Adjustment to profit (loss) for preference share dividends Example

Xduration, debit

IAS 33.70 a Example

838000

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. Other facts assumed are as follows:

Average market price of ordinary shares: The average market prices of ordinary shares for the calendar year 20X1 were as follows:

	First quarter	CU49
	Second quarter	CU60
	Third quarter	CU67
	Fourth quarter	CU67

The average market price of ordinary shares from 1 July to 1 September 20X1 was CU65.

Ordinary shares: The number of ordinary shares outstanding at the beginning of 20X1 was 5,000,000. On 1 March 20X1, 200,000 ordinary shares were issued for cash.

Convertible bonds: In the last quarter of 20X0, 5 per cent convertible bonds with a principal amount of CU12,000,000 due in 20 years were sold for cash at CU1,000 (par). Interest is payable twice a year, on 1 November and 1 May. Each CU1,000 bond is convertible into 40 ordinary shares. No bonds were converted in 20X0. The entire issue was converted on 1 April 20X1 because the issue was called by Company A.

Convertible preference shares: In the second quarter of 20X0, 800,000 convertible preference shares were issued for assets in a purchase transaction. The quarterly dividend on each convertible preference share is CU0.05, payable at the end of the quarter for shares outstanding at that date. Each share is convertible into one ordinary share. Holders of 600,000 convertible preference shares converted their preference shares into ordinary shares on 1 June 20X1.

Warrants: Warrants to buy 600,000 ordinary shares at CU55 per share for a period of five years were issued on 1 January 20X1. All outstanding warrants were exercised on 1 September 20X1.

Options: Options to buy 1,500,000 ordinary shares at CU75 per share for a period of 10 years were issued on 1 July 20X1. No options were exercised during 20X1 because the exercise price of the options exceeded the market price of the ordinary shares.

Tax rate: The tax rate was 40 per cent for 20X1.

20X1	Profit (loss) from continuing operations attributable to the parent entity(a)			Profit (loss) attributable to the parent entity
		CU			CU
First quarter		5,000,000			5,000,000
Second quarter		6,500,000			6,500,000
Third quarter	1,000,000			(1,000,000)(b)
Fourth quarter		(700,000)			(700,000)
Full year		11,800,000			9,800,000
(a) This is the control number (before adjusting for preference dividends). (b) Company A had a CU2,000,000 loss (net of tax) from discontinued operations in the third quarter.

First Quarter 20X1
Basic EPS calculation							CU
Profit from continuing operations attributable to the parent entity							5,000,000
Less: preference share dividends							(40,000)(a)
Profit attributable to ordinary equity holders of the parent entity							4,960,000
Dates		Shares outstanding		Fraction of period			Weighted-average shares
1 January⁠–⁠28 February		5,000,000		2/3			3,333,333
Issue of ordinary shares on 1 March
1 March⁠–⁠31 March		200,000		1/3			1,733,333
Weighted-average shares		5,200,000					5,066,666
Basic EPS							CU0.98
Diluted EPS calculation
Profit attributable to ordinary equity holders of the parent entity							CU4,960,000
Plus: profit impact of assumed conversions
	Preference share dividends			CU40,000	(a)
	Interest on 5% convertible bonds			CU90,000	(b)
Effect of assumed conversions							CU130,000
Profit attributable to ordinary equity holders of the parent entity including assumed conversions							CU5,090,000
Weighted-average shares							5,066,666
Plus: incremental shares from assumed conversions
	Warrants			0	(c)
	Convertible preference shares			800,000
	5% convertible bonds			480,000
Dilutive potential ordinary shares							1,280,000
Adjusted weighted-average shares							6,346,666
Diluted EPS							CU0.80
(a) 800,000 shares × CU0.05 (b) (CU12,000,000 × 5%) ÷ 4; less taxes at 40% (c) The warrants were not assumed to be exercised because they were antidilutive in the period (CU55 [exercise price] > CU49 [average price]).

Second Quarter 20X1
Basic EPS calculation						CU
Profit from continuing operations attributable to the parent entity						6,500,000
Less: preference share dividends						(10,000)(a)
Profit attributable to ordinary equity holders of the parent entity						6,490,000
Dates		Shares outstanding		Fraction of period			Weighted-average shares
1 April		5,200,000
Conversion of 5% bonds on 1 April		480,000
1 April⁠–⁠31 May		5,680,000		2/3		3,786,666
Conversion of preference shares 1 June		600,000
1 June⁠–⁠30 June		6,280,000		1/3		2,093,333
Weighted-average shares						5,880,000
Basic EPS						CU1.10
Diluted EPS calculation
Profit attributable to ordinary equity holders of the parent entity						CU6,490,000
Plus: profit impact of assumed conversions
	Preference share dividends			CU10,000(a)
Effect of assumed conversions						CU10,000
Profit attributable to ordinary equity holders of the parent entity including assumed conversions						CU6,500,000
Weighted-average shares						5,880,000
Plus: incremental shares from assumed conversions
	Warrants			50,000(b)
	Convertible preference shares			600,000(c)
Dilutive potential ordinary shares						650,000
Adjusted weighted-average shares						6,530,000
Diluted EPS						CU1.00
(a) 200,000 shares × CU0.05 (b) CU55 × 600,000 = CU33,000,000; CU33,000,000 ÷ CU60 = 550,000; 600,000 – 550,000 = 50,000 shares OR [(CU60 – CU55) ÷ CU60] × 600,000 shares = 50,000 shares (c) (800,000 shares × 2/3) + (200,000 shares × 1/3)

Third Quarter 20X1
Basic EPS calculation							CU
Profit from continuing operations attributable to the parent entity							1,000,000
Less: preference share dividends							(10,000)
Profit from continuing operations attributable to ordinary equity holders of the parent entity							990,000
Loss from discontinued operations attributable to the parent entity							(2,000,000)
Loss attributable to ordinary equity holders of the parent entity							(1,010,000)
Dates		Shares outstanding		Fraction of period			Weighted-average shares
1 July⁠–⁠31 August		6,280,000		2/3			4,186,666
Exercise of warrants on 1 September		600,000
1 September⁠–⁠30 September		6,880,000		1/3			2,293,333
Weighted-average shares							6,480,000
Basic EPS
Profit from continuing operations							CU0.15
Loss from discontinued operations							(CU0.31)
Loss							(CU0.16)
Diluted EPS calculation
Profit from continuing operations attributable to ordinary equity holders of the parent entity							CU990,000
Plus: profit impact of assumed conversions
	Preference share dividends			CU10,000
Effect of assumed conversions							CU10,000
Profit from continuing operations attributable to ordinary equity holders of the parent entity including assumed conversions							CU1,000,000
Loss from discontinued operations attributable to the parent entity							(CU2,000,000)
Loss attributable to ordinary equity holders of the parent entity including assumed conversions							(CU1,000,000)
Weighted-average shares							6,480,000
Plus: incremental shares from assumed conversions
	Warrants			61,538(a)
	Convertible preference shares			200,000
Dilutive potential ordinary shares							261,538
Adjusted weighted-average shares							6,741,538
Diluted EPS
Profit from continuing operations							CU0.15
Loss from discontinued operations							(CU0.30)
Loss							(CU0.15)
(a) [(CU65 − CU55) ÷ CU65] × 600,000 = 92,308 shares; 92,308 × 2/3 = 61,538 shares

Note: The incremental shares from assumed conversions are included in calculating the diluted per‑share amounts for the loss from discontinued operations and loss even though they are antidilutive. This is because the control number (profit from continuing operations attributable to ordinary equity holders of the parent entity, adjusted for preference dividends) was positive (ie profit, rather than loss).

Fourth Quarter 20X1
Basic EPS calculation				CU
Loss from continuing operations attributable to the parent entity				(700,000)
Add: preference share dividends				(10,000)
Loss attributable to ordinary equity holders of the parent entity				(710,000)
Dates	Shares outstanding	Fraction of period		Weighted-average shares
1 October⁠–⁠31 December	6,880,000	3/3		6,880,000
Weighted-average shares				6,880,000
Basic and diluted EPS
Loss attributable to ordinary equity holders of the parent entity				(CU0.10)

Note: The incremental shares from assumed conversions are not included in calculating the diluted per‑share amounts because the control number (loss from continuing operations attributable to ordinary equity holders of the parent entity adjusted for preference dividends) was negative (ie a loss, rather than profit).

Full Year 20X1
Basic EPS calculation							CU
Profit from continuing operations attributable to the parent entity							11,800,000
Less: preference share dividends							(70,000)
Profit from continuing operations attributable to ordinary equity holders of the parent entity							11,730,000
Loss from discontinued operations attributable to the parent entity							(2,000,000)
Profit attributable to ordinary equity holders of the parent entity							9,730,000
Dates		Shares outstanding		Fraction of period		Weighted-average shares
1 January⁠–⁠28 February		5,000,000		2/12			833,333
Issue of ordinary shares on 1 March		200,000
1 March⁠–⁠31 March		5,200,000		1/12			433,333
Conversion of 5% bonds on 1 April		480,000
1 April⁠–⁠31 May		5,680,000		2/12			946,667
Conversion of preference shares on 1 June		600,000
1 June⁠–⁠31 August		6,280,000		3/12			1,570,000
Exercise of warrants on 1 September		600,000
1 September⁠–⁠31 December		6,880,000		4/12			2,293,333
Weighted-average shares							6,076,667
Basic EPS
Profit from continuing operations							CU1.93
Loss from discontinued operations							(CU0.33)
Profit							CU1.60
Diluted EPS calculation
Profit from continuing operations attributable to ordinary equity holders of the parent entity							CU11,730,000
Plus: profit impact of assumed conversions
	Preference share dividends			CU70,000
	Interest on 5% convertible bonds			CU90,000(a)
Effect of assumed conversions							CU160,000
Profit from continuing operations attributable to ordinary equity holders of the parent entity including assumed conversions							CU11,890,000
Loss from discontinued operations attributable to the parent entity							(CU2,000,000)
Profit attributable to ordinary equity holders of the parent entity including assumed conversions							CU9,890,000
Weighted-average shares							6,076,667
Plus: incremental shares from assumed conversions
	Warrants			14,880(b)
	Convertible preference shares			450,000(c)
	5% convertible bonds			120,000(d)
Dilutive potential ordinary shares							584,880
Adjusted weighted-average shares							6,661,547
Diluted EPS
Profit from continuing operations							CU1.78
Loss from discontinued operations							(CU0.30)
Profit							CU1.48
(a) (CU12,000,000 × 5%) ÷ 4; less taxes at 40%. (b) [(CU57.125* – CU55) ÷ CU57.125] × 600,000 = 22,320 shares; 22,320 × 8/12 = 14,880 shares*.The average market price from 1 January 20X1 to 1 September 20X1. (c) (800,000 shares × 5/12) + (200,000 shares × 7/12). (d) 480,000 shares × 3/12.

The following illustrates how Company A might present its earnings per share data in its statement of comprehensive income. Note that the amounts per share for the loss from discontinued operations are not required to be presented in the statement of comprehensive income. [Refer:paragraph 66]

For the year ended 20X1
	CU
Earnings per ordinary share
Profit from continuing operations	1.93
Loss from discontinued operations	(0.33)
Profit	1.60
Diluted earnings per ordinary share
Profit from continuing operations	1.78
Loss from discontinued operations	(0.30)
Profit	1.48

The following table includes the quarterly and annual earnings per share data for Company A. The purpose of this table is to illustrate that the sum of the four quarters’ earnings per share data will not necessarily equal the annual earnings per share data. The Standard does not require disclosure of this information.

	First quarter		Second quarter		Third quarter		Fourth quarter		Full year
	CU		CU		CU		CU		CU
Basic EPS
Profit (loss) from continuing operations	0.98		1.10		0.15		(0.10)		1.93
Loss from discontinued operations	–		–		(0.31)		–		(0.33)
Profit (loss)	0.98		1.10		(0.16)		(0.10)		1.60
Diluted EPS
Profit (loss) from continuing operations	0.80		1.00		0.15		(0.10)		1.78
Loss from discontinued operations	–		–		(0.30)		–		(0.30)
Profit (loss)	0.80		1.00		(0.15)		(0.10)		1.48