Digital asset and Diluted earnings per share: Difference between pages

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1.  ''Assets - dematerialisation - information technology - crypto-assets.''
''Financial ratio analysis - performance ratios.''


Defined broadly, digital assets include any digital information associated with rights of use or ownership interests.
(Diluted EPS).  


This can include dematerialised conventional assets, such as shares or other securities, and any other information held in an information technology system or other digital format, including crypto-assets in a distributed ledger.
Diluted earnings per share are calculated as:


Profit attributable to ordinary shareholders '''÷''' Diluted weighted average number of shares in issue during the period.


2.  ''Assets information technology - crypto-assets.''
Profit after tax attributable to ordinary shareholders is often known as 'earnings' or 'net profit'.


Any digital information associated with rights of use or ownership interests, but excluding dematerialised conventional assets.


<span style="color:#4B0082">'''''Diluted EPS example'''''</span>


3. ''Crypto-assets - distributed ledger.''
Earnings for the period are £40 million and the diluted number of shares is 52 million.


Narrowly, crypto-assets in a distributed ledger.
EPS = £40m / 52m


Sometimes known as "new" digital assets.
= £0.77 (= 77 pence)




== See also ==
'Diluted' earnings per share are calculated by adjusting the earnings and number of shares for the effects of 'dilution' of the current ordinary shareholders' entitlements.
* [[Alternative finance]]
 
* [[Assets]]
 
* [[Bitcoin]]
'Dilution' is defined in IAS 33 as:
* [[Blockchain]]
 
* [[Cambridge Centre for Alternative Finance]]
The reduction in EPS assuming that the number of shares increases because:
* [[Central bank digital currency]]
#Convertible instruments are converted,
* [[Crypto-assets]]
#Options or warrants are exercised, or
* [[Cryptocurrency]]
#Ordinary shares are issued on the satisfaction of specified conditions.
* [[Cryptography]]
 
* [[Dematerialisation]]
* [[Digital currency]]
* [[Distributed ledger]]
* [[Fungible]]
* [[Information technology]]
* [[Law]]
* [[Money]]
* [[Non-fungible token]]
* [[Regulation]]
* [[Security]]
* [[Share]]
* [[Token]]


Relevant accounting standards include IAS 33 and Section 1 of FRS 102.


==External link==


*[https://www.jbs.cam.ac.uk/wp-content/uploads/2020/10/2020-ccaf-legal-regulatory-considerations-report.pdf Legal and Regulatory Implications for Digital Assets - Cambridge Centre for Alternative Finance]
== See also ==
* [[Convertible debt]]
* [[Dilution]]
* [[Earnings]]
* [[Earnings per share]]
* [[IAS 33]]
* [[FRS 102]]
* [[Option]]
* [[Pence]]
* [[Profit attributable to ordinary shareholders]]
* [[Warrant]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]
[[Category:Technology]]

Revision as of 07:41, 10 February 2022

Financial ratio analysis - performance ratios.

(Diluted EPS).

Diluted earnings per share are calculated as:

Profit attributable to ordinary shareholders ÷ Diluted weighted average number of shares in issue during the period.

Profit after tax attributable to ordinary shareholders is often known as 'earnings' or 'net profit'.


Diluted EPS example

Earnings for the period are £40 million and the diluted number of shares is 52 million.

EPS = £40m / 52m

= £0.77 (= 77 pence)


'Diluted' earnings per share are calculated by adjusting the earnings and number of shares for the effects of 'dilution' of the current ordinary shareholders' entitlements.


'Dilution' is defined in IAS 33 as:

The reduction in EPS assuming that the number of shares increases because:

  1. Convertible instruments are converted,
  2. Options or warrants are exercised, or
  3. Ordinary shares are issued on the satisfaction of specified conditions.


Relevant accounting standards include IAS 33 and Section 1 of FRS 102.


See also