IAS33-Earnings Per Share

Question 1

What ratio does the stock market place great emphasis on?
How is this calculated?

Answer 1

Price/earnings
Price or MV per shares/earnings per share

Question 2

EPS
Why is there a separate adjustment/deduction?
What is the calculation?
What is IAS 33 trying to improve?
When is there no obligation to pay the dividend on preference shares?

Answer 2

Because they’re included in fixed costs
PAT/Ordinary Shares
Comparison between periods and entities
When they are irredeemable

Question 3

BEPS
Calculation?
What if there’s no obligation to pay preference dividends?

Answer 3

PAT/weighted average number of ordinary shares outstanding
PAT-pref div (% x number of shares)

Question 4

If an option is presented what do you add to the calculation?
What do we calculate for step one? How?
How do work out what the equivalent of this is in ordinary shares?
How do we work out which of these shares are free?
How do we calculate DEPS once we have this figure?

Answer 4

Free shares
Value of option shares=option offered x £ option
Answer to above/fv ordinary shares
Number of shares-answer above
PAT/ordinary shares + free shares

Question 5

What needs to be deducted from pat?
What are redeemable shares deducted from?
What happens with irredeemable shares from previous year?
What aren’t ordinary shares reflected in EPS?

Answer 5

PAT attributable to NCI
Fixed costs
Accrued/obligation last year
Distributed to shareholders

Question 6

Bonus Shares
What are they deemed to have been?
What is the journal if company makes bonus issue?
How do we work out the amount of new shares issued?
What do we then add these shares to?

Answer 6

Always in issue
Dr Reserves Cr Restated Share Cap
Ordinary shares/(number of bonus shares issued x shares) x ordinary shares issued
Ordinary shares

Question 7

How do we work out the comparator?
What’s the inverted bf?

Answer 7

Ly EPS x Inverted BF
TERP/Cum Rights

Question 8

Issue of New Shares in Year
What is the working for this?
What values do we add in the cum share column?
What’s the different if it is a rights issue?

Answer 8

Date n/12 x Actual No Cum Shares
We always add the og number of shares adding in any extra shares at the date they were added
Include the BF after Cum shares and times by this

Question 9

What is the BF figure?
How do we work out TERP?

Answer 9

Cum rights/TERP
(Number of rights shares x price)+(number of original shares x price)
Then share the total price by the total shares