Diluted earnings per share: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Add link to FRS 22 page.) |
imported>Doug Williamson (Update for FRS 102) |
||
| Line 15: | Line 15: | ||
#Options or warrants are exercised, or | #Options or warrants are exercised, or | ||
#Ordinary shares are issued upon the satisfaction of specified conditions. | #Ordinary shares are issued upon the satisfaction of specified conditions. | ||
Relevant accounting standards include IAS 33 and Section 1 of FRS 102. | |||
| Line 22: | Line 25: | ||
* [[Earnings]] | * [[Earnings]] | ||
* [[Earnings per share]] | * [[Earnings per share]] | ||
* [[IAS 33]] | * [[IAS 33]] | ||
* [[FRS 102]] | |||
* [[Option]] | * [[Option]] | ||
* [[Warrant]] | * [[Warrant]] | ||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
Revision as of 11:53, 6 November 2015
(Diluted EPS).
'Basic' earnings per share are calculated as:
Profit attributable to ordinary shareholders ÷ Weighted average number of shares in issue during the period.
'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 for financial reporting purposes in IAS 33 as:
A reduction in earnings per share resulting from the assumption that:
- Convertible instruments are converted,
- Options or warrants are exercised, or
- Ordinary shares are issued upon the satisfaction of specified conditions.
Relevant accounting standards include IAS 33 and Section 1 of FRS 102.
