IAS 33 Earnings per share

Weighted average number of shares outstanding

The calculation of the weighted average number of shares outstanding itself is not that difficult (see IAS 33 Example 2 or below example). And it is even easier if no changes have taken place in the number/amount of shares issued during the year. The general principle under IAS 33 is that shares should be included in calculating the weighted average number of shares outstanding during a year from the date the consideration is receivable (which in general is the date of the issue of the shares). [IAS 33 21]

Where shares are issued as consideration for the purchase of an asset or the payment of a liability, the shares are included in the calculation of the weighted average … Read more

Earnings per share

The objective of IAS 33 Earnings per share is prescribing principles for the determination and presentation of earnings per share, so as to improve performance comparisons between different entities in the same reporting period and between different reporting periods for the same entity.

Earnings per share is mostly used in the consolidated financial statements of a group with a parent:

  1. 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
  2. that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organization for the purpose of issuing ordinary shares in a public market.

However, it also covers the separate or individual financial statements of a single entity with the same characteristics under i. and ii. above.

Basic earnings per share (EPS) – calculation method

An entity shall calculate basic earnings per share amounts for profit or loss attributable to ordinary equity holders of the parent entity and, if presented, profit or loss from continuing operations attributable to those equity holders [IAS 33 9].Read More »Earnings per share