Earnings per Share

Question 1

How does IAS 33 earnings per share achieve comparability?

Answer 1

• defining earnings
• methods for including he number of shares in the calculation
• required to be shown on the face of the statement of profit or loss

Question 2

How do you calculate Earnings per Share?

Answer 2

Weighted average number of shares outstanding

Question 3

redeemable preference shares

Answer 3

treated as ‘debt’ and the finance costs will be already be included in the profit/loss

Question 4

Irredeemable preference shares

Answer 4

treated as ‘equity’ so the dividend must be redeemed from net profit

Question 5

cumulative preference shares

Answer 5

always treat dividends as having been paid in the correct period