Indian Accounting Standard (Ind AS) 33 Summary
Indian Accounting Standard (Ind AS) 33, Earnings per Share is applicable to companies that have issued ordinary shares.
When the entity presents both consolidated financial statements and separate financial statements prepared in accordance with Ind AS 110, Consolidated Financial Statements and Ind AS 27, Separate Financial Statements respectively, the disclosures required by this standard shall be presented both in the consolidated financial statements and separate financial statements. In consolidated financial statements such disclosures shall be based on consolidated information and in separate financial statements such disclosures shall be based on information given in separate financial statements.
When any item of income or expense which is otherwise required to be recognised in profit and loss in accordance with Ind AS 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 (EPS).
Basic EPS is calculated by dividing the earnings attributable to holders of ordinary equity of the parent by the weighted average number of ordinary shares outstanding during the period.
Diluted EPS is calculated by adjusting profit or loss attributable to ordinary equity holders and the weighted average number of shares outstanding for the effects of all dilutive potential ordinary shares.
Potential ordinary shares are considered dilutive only if they decrease EPS or increase loss per share from continuing operations. In determining whether potential ordinary shares are dilutive, each issue or series of potential ordinary shares is considered separately.
Contingently issuable ordinary shares are included in basic EPS only from the date when all the necessary conditions are satisfied (i.e. the events have occurred). If the conditions are not satisfied, the number of contingently issuable shares included in the diluted EPS is based on the number of shares that would be issuable if the end of the reporting period were the end of the contingency period. Restatement is not permitted if the conditions are not met when the contingency period expires.
Outstanding ordinary shares that are subject to recall are not treated as outstanding and are excluded from the calculation of basic EPS until the date the shares are no longer subject to recall.
If a contract may be settled in either cash or shares at the entity’s option, then it is presumed that it will be settled in ordinary shares and the resulting potential ordinary shares are used to calculate diluted EPS.
If a contract may be settled in either cash or shares at the holder’s option then the more dilutive of cash and share settlement is used to calculate diluted EPS.
For diluted EPS, diluted potential ordinary shares are determined independently for each period presented.
If the number of ordinary shares outstanding, changes without a corresponding change in resources, then the weighted average number of ordinary shares outstanding during all period presented is adjusted retrospectively for both basic and diluted EPS.
Basic and diluted EPS for profit or loss from continuing operations and profit or loss for the period for each class of ordinary shares that has a different right to share in profit for the period, should be presented in the statement of profit and loss with equal prominence for all the periods presented.
Information on basic and diluted EPS is required to be disclosed for discontinued operations either in the statement of profit and loss or in the notes for entities that report discontinued operations.
Adjusted basic and diluted EPS based on alternative earnings measures may be disclosed and explained in the notes to the financial statements.
If an entity discloses, in addition to basic and diluted earnings per share, amounts per share using a reported component of the statement of profit and loss other than one required by this standard, such amounts shall be calculated using the weighted average number of ordinary shares determined in accordance with this standard.