WELCOME TO THE

PRESENTATION
PRESENTATION TOPIC:

IAS 33: EARNINGS

PER SHARE
OUTLINES:
 Introduction
 Scope & Objective
 Simple Capital Structure
 Complex Capital Structure
 Determining Dilution Effects
 Contingent Issuances of Ordinary Shares
 No Anti-dilution
 Presentation & Disclosure
INTRODUCTIO
N
INTRODUCTION:
The IFRS governing the calculation and disclosure of
earnings per share (EPS) is IAS 33. It requires that one
measure or two measures in the case of those reporting
entities having complex capital structures- be presented
for each period for which a statement of profit or loss
and other comprehensive income being reported.
However, investors in particular are devoted users of
earning per share data which is considered by many to be
the single best predictor of the entity’s performance.
Since such data are being computed in widely varying
ways, the accounting standard setters decided to at least
impose uniform practices.
OBJECTIVE
Objective of IAS 33
 The objective of IAS 33 is to set out principles for: the
calculation of EPS; and
 the presentation of EPS in the financial statements

The purpose of standardizing the calculation and presentation

of EPS is to make it easier for the users of financial statements
to compare the performance of:

 different entities in the same reporting period; and

 the same entity for different reporting periods over time.
SCOPE:
This Standard shall apply to:
(a)the separate or individual financial statements of an
entity:
(i)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
(ii)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; and
SCOPE: CONTI
(b)the consolidated financial statements of a group with a
parent:

(i)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
(ii)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.
SCOPE: CONTI

3. An entity that discloses earnings per share shall calculate

and disclose earnings per share in accordance with this
Standard.
4. When an entity presents both consolidated financial
statements and separate financial statements prepared in
accordance with IFRS-10 Consolidated and Separate Financial
Statements, the disclosures required by this Standard need be
presented only on the basis of the consolidated information. An
entity that chooses to disclose earnings per share based on its
separate financial statements shall present such earnings per
share information only in its statement of comprehensive
income. An entity shall not present such earnings per share
information in the consolidated financial statements.
SCOPE: CONTI

 The following terms are used in this Standard with the meanings
specified:
 Antidilution is an increase in earnings per share or a reduction in loss
per share resulting from the assumption that convertible instruments
are converted, that options or warrants are exercised, or that ordinary
shares are issued upon the satisfaction of specified conditions.
 A contingent share agreement is an agreement to issue shares that is
dependent on the satisfaction of specified conditions.
 Contingently issuable ordinary shares are ordinary shares issuable for
little or no cash or other consideration upon the satisfaction of
specified conditions in a contingent share agreement.
 Dilution is a reduction in earnings per share or an increase in loss per
share resulting from the assumption that convertible instruments are
converted, that options or warrants are exercised, or that ordinary
shares are issued upon the satisfaction of specified conditions.
SCOPE: CONTI

 Options, warrants and their equivalents are financial

instruments that give the holder the right to purchase
ordinary shares.
 An ordinary share is an equity instrument that is
subordinate to all other classes of equity instruments.
 A potential ordinary share is a financial instrument or
other contract that may entitle its holder to ordinary
shares.
 Put options on ordinary shares are contracts that give the
holder the right to sell ordinary shares at a specified price
for a given period.
SCOPE: CONTI
6. Ordinary shares participate in profit for the period only after other types of
shares such as preference shares have participated. An entity may have more
than one class of ordinary shares. Ordinary shares of the same class have the
same rights to receive dividends.
7. Examples of potential ordinary shares are:
(a)financial liabilities or equity instruments, including preference shares, that
are convertible into ordinary shares;
(b)options and warrants;
(c)shares that would be issued upon the satisfaction of conditions resulting
from contractual arrangements, such as the purchase of a business or other
assets.
8. Terms defined in IAS 32 Financial Instruments: Presentation are used in
this Standard with the meanings specified in paragraph 11 of IAS 32, unless
other wise noted. IAS 32 defines financial instrument, financial asset,
financial liability, equity instrument and fair value, and provides guidance on
applying those definitions.
MEASUREMENT
Basic earnings per share
 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.
Basic earnings per share shall be calculated by dividing profit or
loss attributable to ordinary equity holders of the parent entity
(the numerator) by the weighted average number of ordinary
shares outstanding (the denominator) during the period.

 The objective of basic earnings per share information is to provide

a measure of the interests of each ordinary share of a parent entity
in the performance of the entity over the reporting period.
MEASUREMENT
 All items of income and expense attributable to ordinary equity holders
of the parent entity that are recognized in a period, including tax expense
and dividends on preference shares classified as liabilities are included in
the determination of profit or loss for the period attributable to ordinary
equity holders of the parent entity.
 The after-tax amount of preference dividends that is deducted from profit
or loss is:
(a)the after-tax amount of any preference dividends on non-cumulative
preference shares declared in respect of the period; and
(b)the after-tax amount of the preference dividends for cumulative
preference shares required for the period, whether or not the dividends
have been declared. The amount of preference dividends for the period
does not include the amount of any preference dividends for cumulative
preference shares paid or declared during the current period in respect of
previous periods.
MEASUREMENT
Earnings
 For the purpose of calculating basic earnings per share,
the amounts attributable to ordinary equity holders of
the parent entity in respect of:
(a)profit or loss from continuing operations attributable to
the parent entity; and
(b)profit or loss attributable to the parent entity

 shall be the amounts in (a) and (b) adjusted for the

after-tax amounts of preference dividends, differences
arising on the settlement of preference shares, and other
similar effects of preference shares classified as equity.
SHARES

For the purpose of calculating basic earnings per share, the

number of ordinary shares shall be the weighted average number
of ordinary shares outstanding during the period.
 Using the weighted average number of ordinary shares outstanding
during the period reflects the possibility that the amount of
shareholders’ capital varied during the period as a result of a larger or
smaller number of shares being outstanding at any time. The
weighted average number of ordinary shares outstanding during the
period is the number of ordinary shares outstanding at the beginning
of the period, adjusted by the number of ordinary shares bought back
or issued during the period multiplied by a time-weighting factor.
 The time-weighting factor is the number of days that the shares are
outstanding as a proportion of the total number of days in the period;
a reasonable approximation of the weighted average is adequate in
many circumstances.
SHARES
Shares are usually included in the weighted average number of
shares from the date consideration is receivable (which is
generally the date of their issue), for example:
(a)ordinary shares issued in exchange for cash are included when
cash is receivable;
(b)ordinary shares issued on the voluntary reinvestment of dividends
on ordinary or preference shares are included when dividends are
reinvested;
(c)ordinary shares issued as a result of the conversion of a debt
instrument to ordinary shares are included from the date that interest
ceases to accrue;
(d)ordinary shares issued in place of interest or principal on other
financial instruments are included from the date that interest ceases
to accrue;
SHARES
(e)ordinary shares issued in exchange for the settlement of a liability of the entity are
included from the settlement date;
(f)ordinary shares issued as consideration for the acquisition of an asset other than cash
are included as of the date on which the acquisition is recognized; and
(g)ordinary shares issued for the rendering of services to the entity are included as the
services are rendered.
The timing of the inclusion of ordinary shares is determined by the terms and
conditions attaching to their issue. Due consideration is given to the substance of any
contract associated with the issue.
Ordinary shares issued as part of the consideration transferred in a business
combination are included in the weighted average number of shares from the
acquisition date. This is because the acquirer incorporates into its statement of
comprehensive income the acquiree’s profits and losses from that date.
Ordinary shares that will be issued upon the conversion of a mandatorily convertible
instrument are included in the calculation of basic earnings per share from the date the
contract is entered into.
DILUTED EPS
 An entity shall calculate diluted 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.
 For the purpose of calculating diluted earnings per share, an
entity shall adjust profit or loss attributable to ordinary
equity holders of the parent entity, and the weighted average
number of shares outstanding, for the effects of all dilutive
potential ordinary shares.
 The objective of diluted earnings per share is consistent with
that of basic earnings per share—to provide a measure of the
interest of each ordinary share in the performance of an entity—
while giving effect to all dilutive potential ordinary shares
outstanding during the period.
DILUTED EPS
 profit or loss attributable to ordinary equity holders of
the parent entity is increased by the after-tax amount of
dividends and interest recognized in the period in respect
of the dilutive potential ordinary shares and is adjusted
for any other changes in income or expense that would
result from the conversion of the dilutive potential
ordinary shares; and
 the weighted average number of ordinary shares
outstanding is increased by the weighted average number
of additional ordinary shares that would have been
outstanding assuming the conversion of all dilutive
potential ordinary shares.
EARNINGS
For the purpose of calculating diluted earnings per share,
an entity shall adjust profit or loss attributable to ordinary
equity holders of the parent entity, as calculated in
accordance with paragraph 12, by the after-tax effect of:
(a)any dividends or other items related to dilutive potential
ordinary shares deducted in arriving at profit or loss
attributable to ordinary equity holders of the parent entity
as calculated in accordance with paragraph 12;
(b)any interest recognized in the period related to dilutive
potential ordinary shares; and
(c)any other changes in income or expense that would
result from the conversion of the dilutive potential
ordinary shares.
SHARES
 For the purpose of calculating diluted earnings per share,
the number of ordinary shares shall be the weighted
average number of ordinary shares calculated in
accordance with paragraphs 19 and 26, plus the weighted
average number of ordinary shares that would be issued on
the conversion of all the dilutive potential ordinary shares
into ordinary shares. Dilutive potential ordinary shares
shall be deemed to have been converted into ordinary
shares at the beginning of the period or, if later, the date of
the issue of the potential ordinary shares.
 Dilutive potential ordinary shares shall be determined
independently for each period presented. The number of
dilutive potential ordinary shares included in the year-to-date
period is not a weighted average of the dilutive potential
ordinary shares included in each interim computation.
SHARES

 Potential ordinary shares are weighted for the period they are outstanding.
Potential ordinary shares that are cancelled or allowed to lapse during the
period are included in the calculation of diluted earnings per share only for the
portion of the period during which they are outstanding. Potential ordinary
shares that are converted into ordinary shares during the period are included in
the calculation of diluted earnings per share from the beginning of the period
to the date of conversion; from the date of conversion, the resulting ordinary
shares are included in both basic and diluted earnings per share.

 A subsidiary, joint venture or associate may issue to parties other than the
parent, venturer or investor potential ordinary shares that are convertible into
either ordinary shares of the subsidiary, joint venture or associate, or ordinary
shares of the parent, venturer or investor (the reporting entity). If these
potential ordinary shares of the subsidiary, joint venture or associate have a
dilutive effect on the basic earnings per share of the reporting entity, they are
included in the calculation of diluted earnings per share.
DILUTIVE POTENTIAL ORDINARY SHARES

Potential ordinary shares shall be treated as dilutive when, and only when, their
conversion to ordinary shares would decrease earnings per share or increase loss per share
from continuing operations.

For the purpose of calculating diluted earnings per share, an entity shall assume the
exercise of dilutive options and warrants of the entity. The assumed proceeds from these
instruments shall be regarded as having been received from the issue of ordinary shares at
the average market price of ordinary shares during the period. The difference between the
number of ordinary shares issued and the number of ordinary shares that would have been
issued at the average market price of ordinary shares during the period shall be treated as
an issue of ordinary shares for no consideration.

Convertible preference shares are antidilutive whenever the amount of the dividend on
such shares declared in or accumulated for the current period per ordinary share
obtainable on conversion exceeds basic earnings per share. Similarly, convertible debt is
antidilutive whenever its interest (net of tax and other changes in income or expense) per
ordinary share obtainable on conversion exceeds basic earnings per share
SIMPLE CAPITAL STRUCTURE:
A corporation’s capital structure consists only of common
stock or includes no potentially dilutive convertible
securities, options, warrants, or other rights that upon
conversion or exercise could dilute earnings per common
share.
Computational Guidelines:
In its simplest form EPS is calculated As follows:
ADJUSTMENTS TO THE NUMERATOR &
DENOMINATOR:
Numerator:
 Must reflect any claims against it by holders of senior
securities
 For cumulative preference shares, the dividend is to be
deducted from profit (declared or not)
 Cumulative dividends in arrears that are paid currently
do not affect EPS.
 However, the amount in arrears should be disclosed.
ADJUSTMENTS TO THE NUMERATOR &
DENOMINATOR (CONT’D):
Denominator:
 The number of shares required should be excluded from
EPS calculations from the date of acquisition.
 The number of shares newly issued is included in the
computation only for the period after their issuance date.
 Share split or share dividend should be given retroactive
recognition for all periods presented.
 The shares issued in connection with a business
combination are considered issued and outstanding as of
the date of acquisition and the income of the acquired
company is also included.
EPS COMPUTATION – SIMPLE CAPITAL
STRUCTURE:
Example:
Following data has been extracted from the financial
statements of XYZ Ltd. You are required to compute the
earnings per share ratio of the company for the year
2014.
Data Taken From Income Statement:

Particulars Amount
Net Income $1500
Preferred Dividend $180
Income $1320
EPS COMPUTATION – SIMPLE CAPITAL
STRUCTURE (CONT’D):
Data Taken From Balance Sheet:

Particulars 2013 2014

Preferred Stock – $3000 $3000
6%
Common Stock – $2376 $2376
Par value $15

From the given data, EPS is calculated as follows:

EPS ratio = 1320 / 158 = 8.35 per share
Average number of shares outstanding during 2014:
[($2376/$15) + ($2376/$15)] /2
= 158
COMPLEX CAPITAL STRUCTURE:
A complex capital structure is the one that has dilutive
potential ordinary shares, which are shares or other
instruments that have the potential to be converted or
exercised and thereby reduce EPS.
The difference between basic EPS and diluted EPS is:
COMPLEX CAPITAL STRUCTURE
(CONT’D):
o The effect of any antidilutive potential ordinary shares
are not to be included in the computation of diluted
earnings per share.
 A complex capital structure requires dual presentation of
both basic EPS and diluted EPS even when the basic
earnings per share is a loss per share.
 The profit or loss attributable to ordinary equity holders
and the weighted average number of ordinary shares
outstanding should be adjusted for the effects of the
dilutive potential ordinary shares.
COMPLEX CAPITAL STRUCTURE
(CONT’D):
According to IAS 33, the numerator should be adjusted by
the after – tax effect, if any, of the following items:
 Interest recognized in the period for the convertible debt
which constitutes dilutive potential ordinary shares.
 Any dividends recognized in the period for the
convertible debt which constitutes dilutive potential
ordinary shares, where those dividends have been
deducted in arriving at net profit attributable to ordinary
equity holders
COMPLEX CAPITAL STRUCTURE
(CONT’D):
 Any other, consequential changes in profit or loss that
would result from the conversion of the dilutive potential
ordinary shares.
Example:
The conversion of debentures into ordinary shares will
reduce interest expense which in turn will cause an
increase in the profit for the period.
 The denominator should be adjusted by the weighted
average number of ordinary shares that would have been
outstanding assuming conversion of all dilutive potential
ordinary shares.
EXAMPLE: COMPLEX CAPITAL
STRUCTURE:
Assume that he company XYZ has a convertible bond
issue: 100 bonds, $1000 par value, yielding 10% , issued
at par for the total of $100,000. Each bond can be
converted into 50 shares of the common stock. The tax
rate is 30%. XYZ’s weighted average number of shares,
used to compute basic EPS, is 10,000. XYZ reported an
NI of $ 12000, and paid preferred dividends of $ 2,000.
What is the basic EPS? What is the diluted EPS?
1) Basic EPS:
EPS = (12000 - 2000) / 10,000 = $1.00
EXAMPLE: COMPLEX CAPITAL
STRUCTURE (CONT’D):
2) Diluted EPS:
Adjustment to the denominator: 100 × 50 = 5000
Adjustment to the numerator: 100 × $1000 × 0.1 × (1 –
0.3) = $7000
Diluted EPS = (12000 – 2000 + 7000) / 10000+5000 = $
1.13
DETERMINING DILUTION EFFECTS:
 To ascertain whether the effect would be dilutive or
antidilutive, each potential ordinary share issue must be
evaluated separately from other potential ordinary share
issuances.
 The most dilutive of the potential ordinary share issues
must be dealt with first, then the next most dilutive and
so on.
DETERMINING DILUTION EFFECTS
(CONT’D):
To determine the sequencing of dilution analysis, it is
necessary to use a “trial and error” approach.

Options &
Warrants
Convertible
Securities
DETERMINING DILUTION EFFECTS
(CONT’D):
Options and Warrants:
IFRS prescribes the use of the “treasury share method” to
deal with the hypothetical proceeds from the presumed
option and warrant exercises.
Treasury Share Method:
This method assumes that the proceeds from the option
and warrant exercises would have been used to
repurchase outstanding shares, at the average prevailing
market share price during the reporting period.
DETERMINING DILUTION EFFECTS
(CONT’D):
Treasury Stock Method:
Denominator must be increased by net dilution, as follows:
Net dilution = Shares issued – Shares repurchased
Where,
Share issued = Proceeds received / Exercise price
Shares repurchased = Proceeds received / Average market
price per share
DETERMINING DILUTION EFFECTS
(CONT’D):
Example:
Apex Inc, reported net income of $250,000 for the year
ended December 31, 2014. On January 1, 2014, it had
100,000 shares of common stock outstanding. No
changes to the shares outstanding occurred during 2014.
On July 1, 2013, Apex issued 10,000 stock options to its
key executives. Each option permits the holder to
acquire one share of common stock for $10 per share
(exercise price). The average market price of the
common stock was $25. Compute basic and diluted EPS
for 2014.
DETERMINING DILUTION EFFECTS
(CONT’D):
Solution:
Basic EPS = $250,000 /100,000 = $2.50
Test for dilution of options:
- Is exercise price ($10) < Average market price
($25)?......Yes !!!!
Treasury Stock Method:
 Assume exercise at later of 6/1/13 or 1/1/14

 Proceeds received on assumed exercise = $100,000 ($10

* 10,000)
DETERMINING DILUTION EFFECTS
(CONT’D):
 Number of share assumed repurchased at average market
price = 4000 ($100,000 / 2$5)
 Net increase in shares = 6000; {10,000 - 4000}

 Diluted EPS = $250000 / (100,000 + 6,000)= $2.36

Convertible Instruments:
These are assumed to be converted when the effect is
dilutive. Convertible preferred shares will be dilutive if –
the preferred dividend declared < Basic EPS
IF-CONVERTED METHOD:
It is not explicitly employed by IAS 33, the methodology
of this is used for those securities that are currently
sharing in the earnings of the company through the
receipt of interest or dividends as senior securities but
have the potential for sharing in the earnings as ordinary
shares.
IF-CONVERTED METHOD (CONT’D):
Example:
Navid Co. reported net income of $750,000 for the year
ended 31 December 2014. The company had a weighted
average of 690,000 shares of common stock outstanding.
In addition, the company has only one potentially
dilutive security: $50,000 of 6% convertible bonds,
convertible into a total of 10,000 shares. Assuming a tax
rate of 30%, Calculate Navid’s basic and diluted EPS.
IF-CONVERTED METHOD (CONT’D):
Particulars Basic EPS Diluted EPS (Using If
Converted)
Net Income $750,000 $ 750,000
After tax cost of interest 2100
(3000 * .70)
Numerator $750,000 $752,100
Weighted average 690,000 690,000
number of share
outstanding
If Converted 0 10,000
Denominator 690,000 700,000
EPS $1.09 $1.07
CONTINGENT ISSUANCES OF ORDINARY
SHARES:
 Shares whose issuance is contingent on the occurrence of
certain events are considered outstanding and included in
the computation of diluted EPS only if the stipulated
conditions have been met.
 If at the end of the reporting period the triggering event
has not occurred, issuance of the contingently issuable
shares is not to be assumed.
 If the condition must be met and then maintained for a
subsequent period, such as for a two year period then the
effect of the contingent issuance is excluded from basic
EPS but is included in the diluted EPS.
CONTINGENT ISSUANCES OF ORDINARY
SHARES (CONT’D):
 IAS 33 indentifies circumstances in which issuance of
contingent shares is dependent upon meeting both future
earnings and future share price threshold levels. If both
thresholds are met the effect of contingently issuable
shares is included in the computation of diluted EPS.
 For purposes of computing diluted EPS. The number of
retail outlets, level of revenue etc at the end of the
reporting period are to be presumed to remain constant
until the expiration of the contingency period.
CONTINGENT ISSUANCES OF ORDINARY
SHARES (CONT’D):
Example:
Contingent shares will be issued at year end 2014, with
1000 shares issued for each retail outlet in excess of the
number of outlets at the base date, year end 2013. At
year end, 2014, seven new outlets are open. Diluted EPS
should include the assumed issuance of 7000 additional
shares. Basic EPS would not include this, since the
contingency period has not ended and no new shares are
yet required to be issued.
CONTRACTS WHICH MAY BE SETTLED
IN SHARES OR FOR CASH:
 Obligations can be settled in cash or by the issuance of
shares, at the option of the debtor (the reporting entity).
 It is completely different from convertible debt. It is the
debtor not the debt holder which has the right to trigger
the issuance of shares.
 It is to be presumed that the debtor will elect to issue
shares to retire this debt, if this leads to dilute EPS, this
should be included in calculation but not in basic one.
CONTRACTS WHICH MAY BE SETTLED
IN SHARES OR FOR CASH (CONT’D):
Written call options:
A similar result obtains in this case. Creditors have the
right to demand shares instead of cash in settlement of an
obligation.
Written Put options:
The entity may also write put options giving shareholders
the right to demand that entity repurchase certain
outstanding shares. Exercise is to be presumed if the
effect is dilutive.
CONTRACTS WHICH MAY BE SETTLED
IN SHARES OR FOR CASH (CONT’D):
Example:
If the entity is potentially required to buy back 25000 of
its currently outstanding shares at each $40, it must
assume that it will raise the required $1,000,000 cash by
selling new ordinary shares into the market. If the
average market price was $35 during the reporting
period, it must be assumed that $1,000,000 / 35 = 28,572
shares would be issued, for a net dilution of about 3572
net ordinary shares, which is used to be compute diluted
EPS.
NO ANTI-DILUTION:
 No assumption of conversion should be made if the
effect would be anti-dilutive.
 The goal in computing dilutive EPS is to calculate the
maximum dilutive effect.
 Hence, the individual issues of converting securities,
options, and other items should be dealt with from the
most dilutive to the least dilutive to effect this result.
PRESENTATION & DISCLOSURE:
 Entities should present both basic EPS and diluted EPS
in the statement of profit or loss and other
comprehensive income or
 In the statement of profit or loss, if presented separately.
Equal prominence should be given to both the basic EPS
and diluted EPS figures for all periods presented.
 An entity that reports discontinued operation shall
disclose the basic EPS and diluted EPS.
 Entities should present basic EPS and diluted EPS even
if the amounts disclosed are negative.
PRESENTATION & DISCLOSURE
(CONT’D):
 Entities should disclose amounts used as the numerator
in calculating basic EPS and diluted EPS along with a
reconciliation of those amounts to profit or loss fro the
period.
 An entity may choose to present per share amounts using
a reported component of the separate statement of profit
or loss other than profit or loss for the period attributable
to ordinary equity holders.
 Entities are encouraged to disclose the terms and
conditions of financial instruments or contracts
generating potential ordinary shares.
PRESENTATION & DISCLOSURE
(CONT’D):
 If changes in the number of ordinary shares or potential
ordinary shares occur after the end of the reporting
period but before issuance of the financial statements, it
is encouraged to disclose.
 An entity is also encouraged to disclose a description of
ordinary share transactions or potential ordinary share
transactions.
EXAMPLES OF FINANCIAL STATEMENT
DISCLOSURES:

XYZ Ltd
Annual Report 2014
Notes to the consolidated Financial Statements:

Particulars 2014 2013

Millio Million
ns s
Weighted Average Number of shares for basic EPS 50,644 52,408
Effect of dilutive potential shares 314 340
Weighted Average Number of shares for diluted EPS 50,958 52,748

Earnings for Basic & Diluted 6,957 7,968

US GAAP COMPARISON:
The accounting and disclosure requirements for IFRS and
US GAAP are substantially the same. Both require
presentation of basic and diluted EPS on the face of the
income statement. Both IFRS and US GAAP specify that
diluted EPS shall include incremental shares in the
calculations, including the effects of stock options and
warrants using the treasury-stock method and the effects
of contingently issuable shares using the if-converted
method.
US GAAP COMPARISON (CONT’D):
 Both IAS 33 and US GAAP requires the disclosure of
basic EPS in the statement of income.
 Presumes that contracts that may be settled in cash or
shares will be settled in shares unless evidence is
provided to the contrary whereas IAS 33 assumes that
contracts that may be settled in cash or shares will be
settled in shares. Thus, these types of contracts will
always impact the computation of diluted EPS.
THANK YOU !!!!!