International Financial Reporting Standards_guide.pdf

Chapter 32 Earnings per Share (IAS 33) 355
32.5 PRESENTATION AND DISCLOSURE
32.5.1 Basic and diluted earnings per share are shown with equal prominence on the face
of the Statement of Comprehensive Income for each class of ordinary shares with different
rights. Information presented should include:
■ profit or loss from continuing operations attributable to ordinary equity holders of the
parent entity;
■ profit or loss attributable to ordinary equity holders of the parent entity; and
■ any reported discontinued operation.
32.5.2 Basic and diluted losses per share are disclosed when they occur.
32.5.3 Amounts used as numerators for basic and diluted earnings per share and a reconciliation
of those amounts to the net profit or loss for the period should be disclosed.
32.5.4 The weighted average number of ordinary shares used as the denominator in calculating
basic and diluted earnings per share, and a reconciliation of these denominators to
each other, must be disclosed.
32.5.5 If an earnings per share figure in addition to that required by IAS 33 is disclosed, the
following effects must be disclosed:
■ The amounts shall be calculated using the weighted average number of shares
determined in accordance with IAS 33.
■ Related basic and diluted amounts per share should be disclosed with equal
prominence.
■ That figure should be disclosed in the notes
■ The basis on which the numerator is determined should be indicated, including
whether amounts are before or after tax.
■ A reconciliation of the numerator and reported line item should be provided in the
Statement of Comprehensive Income.
■ The same denominator should be used as for basic earnings per share or dilutive
earnings per share (as appropriate).
32.6 FINANCIAL ANALYSIS AND INTERPRETATION
32.6.1 When discussing companies, investors and others commonly refer to earnings per
share. If a company has a simple capital structure, one that contains no convertible bonds or
preferred shares, no warrants or options, and no contingent shares, it will present only its
basic earnings per share.
32.6.2 For complex capital structures, both basic earnings per share and diluted earnings
per share are generally reported. A complex capital structure is one where the company does
have one or more of the following types of securities: convertible bonds, preferred shares,
warrants, options, and contingent shares.