Amounts required to be presented – general

IAS 33 requires the following amounts per share to be presented in the statement of comprehensive income (with equal prominence for basic and diluted EPS for all periods presented):

• profit or loss from continuing operations attributable to the ordinary equity holders of the parent entity; and
• profit or loss attributable to the ordinary equity shareholders of the parent entity.

Earnings per share amounts required for each class of ordinary shares

The amounts disclosed under IAS 33 should be presented for each class of ordinary shares that has a different right to share in profit for the period. They are presented even if the amounts are negative (i.e. a loss per share).

Entities that present a separate statement of profit or loss

If an entity presents items of profit or loss in a separate statement of profit or loss as described in IAS 1, the basic and diluted per share amounts should be presented in that separate statement.

Entities that report a discontinued operation

Entities that report a discontinued operation are required to disclose the basic and diluted amounts per share for the discontinued operation either in the statement of comprehensive income, or in the notes to the financial statements. When a separate statement of profit or loss is presented, the basic and diluted amounts per share for the discontinued operation are presented either in that separate statement or in the notes.

Presentation of amounts per share for discontinued operations Although a literal reading of IAS 33 may suggest that it is necessary to calculate and present EPS for each discontinued operation, it seems unlikely that this is intended given that IFRS 5 does not require separate disclosure of the results of each discontinued operation (but instead requires disclosure of the aggregated results). Therefore, when an entity has more than one discontinued operation but reports the results in aggregate, it is appropriate to give the EPS disclosure on a similar, aggregated, basis. However, when an entity reports the results of each of its discontinued operations separately, either in the statement of comprehensive income or in the notes, the entity may also wish to consider presenting separate EPS measures for each discontinued operation.

Periods for which earnings per share is required to be presented

Earnings per share is presented for every period for which a statement of comprehensive income (or, where applicable, a separate statement of profit or loss) is presented. If diluted EPS is reported for at least one period, it should be reported for all periods presented, even if it equals basic earnings per share. If basic and diluted earnings per share are equal, dual presentation can be accomplished in one line in the statement of comprehensive income.

EPS disclosures for ‘tracking’ or ‘targeted’ shares Some entities issue classes of shares characterised as ‘tracking’ or ‘targeted’ shares to measure the performance of a specific business unit or activity of the entity. The presentation of complete financial statements of the targeted business generally is discouraged, and requires clear, cautionary disclosures, because investors may get an inaccurate view that their investment in targeted shares represents a direct investment in a legal entity. However, condensed financial statements that allow investors to understand fully the computation of earnings available for dividends are preferable to complete statements. EPS should not be shown in separate financial statements of the business unit represented by the tracking shares. EPS disclosures should only be presented in the legal issuer’s financial statements. Per IAS 33, the entity should determine EPS for each class of shares using the two-class method.

Presentation of basic and diluted EPS

An entity should present both basic and diluted EPS on the face of the statement of profit or loss and other comprehensive income; or, if an entity presents the components of profit or loss in a separate statement, it presents the basic and diluted EPS in that separate statement. The basic and diluted EPS should be presented for profit or loss from continuing operations attributable to the entity’s ordinary equity holders and for profit or loss for the period (that is, including both continuing and discontinued operations) attributable to the entity’s ordinary equity holders. The basic and diluted EPS should be presented with equal prominence for all periods presented. This applies even if the basic and diluted EPS are the same.

If basic and diluted EPS are equal, the entity can disclose just one line described as ‘Basic and diluted EPS’.

Disclosure of EPS where there are no discontinued operations In practice, unless an entity has discontinued operations that it should disclose in accordance with IFRS 5, the EPS from continuing operations is likely to be identical to total EPS. Accordingly, if the basic EPS for continuing operations and total EPS is the same, and the diluted EPS is the same, the entity could disclose the figures as follows: Basic EPS for profit from continuing operations and for profit for the year x Diluted EPS for profit from continuing operations and for profit for the year y If the basic and diluted figures are the same, the disclosure could be: Basic and diluted EPS for profit from continuing operations and for profit for the year x

Basic and diluted EPS for discontinued operations is disclosed either on the face of the statement of profit or loss and other comprehensive income (or the income statement, if presented separately) or in the notes.

Disclosure of EPS where there are discontinued operations Where an entity has such operations, its EPS from continuing operations will not be the same as its total EPS, and so disclosure of three basic and three diluted EPS figures will be required. Assuming that the EPS figures for profit or loss on discontinued operations are disclosed on the face of the statement of profit or loss and other comprehensive income, the disclosure might be as follows: Earnings per ordinary share: 20X5 20X4 Profit from continuing operations x x Profit from discontinued operations x x Profit for the period x x Diluted EPS: Profit from continuing operations x x Profit from discontinued operations x x Profit for the period x x

Basic and diluted EPS figures should be calculated and disclosed for each class of ordinary shares if there are more than one class of ordinary shares in issue with different rights to share in the profit for the period.

If an entity incurs a loss, or if the amount that it earns for the ordinary equity holders is a negative figure, basic and diluted EPS should be determined in accordance with IAS 33’s rules and shown as a loss per share.

If the diluted loss per share is the same as the basic loss per share the entity can disclose these in one line.

Disclosure

General

The following should be disclosed:

• the amounts used as the numerators in calculating basic and diluted EPS and a reconciliation of those amounts to the profit or loss attributable to the parent entity for the period. The reconciliation should include the individual effect of each class of instruments that affects EPS;
• the weighted average number of ordinary shares used as the denominators in calculating basic and diluted EPS and a reconciliation of these denominators to each other. The reconciliation should include the individual effect of each class of instruments that affects EPS; and
• instruments (including contingently issuable shares) that could potentially dilute basic EPS in the future, but were not included in the calculation of diluted EPS because they are antidilutive for the period(s) presented.

Restatement for bonus and similar issues

An entity should disclose the fact that the calculations have been adjusted for a capitalisation/bonus issue, share split or reverse share split, occurring either during the period, or after the reporting period but before the financial statements are authorised for issue.

Changes in share capital after the reporting period

A description should be provided of any other changes in ordinary shares or potential ordinary shares after the reporting period that would, had they occurred before the end of the reporting period, have changed significantly the number of ordinary shares or potential ordinary shares outstanding at the end of the period.

IAS 33 lists the following as examples of transactions that might be disclosed under this requirement:

• an issue of shares for cash;
• an issue of shares when the proceeds are used to repay debt or preference shares outstanding at the end of the reporting period;
• the redemption of ordinary shares;
• the conversion or exercise of potential ordinary shares, outstanding at the end of the reporting period, into ordinary shares;
• the issue of warrants, options or convertible instruments; and
• the achievement of conditions that would result in the issue of contingently issuable shares.

Additional disclosures

Disclosure of the numerator and the denominator used in calculating basic and diluted EPS, and of the related re-conciliations, is required.

Additional EPS disclosures required This example illustrates the basic and diluted EPS figures for the profit attributable to ordinary equity holders only, and does not illustrate the disclosure for continuing or discontinued operations. Year ended 31 December 20X5 Earnings Number of shares Per-share amount (C) (C) Profit for the year 6,525,000 Less: preference dividends 75,000 Basic EPS: Earnings available to ordinary shareholders 6,450,000 2,500,000 2.58 Effect of dilutive securities: Options 45,000 Convertible preferred stock 35,000 255,000 6% convertible debentures 60,000 60,000 Diluted EPS: Adjusted earnings 6,545,000 2,860,000 2.29

IAS 33 also requires disclosure of instruments, including contingently issuable shares, that could dilute EPS in the future but that were not included in the computation of diluted EPS in the period (or periods) presented, because they were anti-dilutive in that period (or those periods).

As basic and diluted EPS must be restated for bonus issues, share splits, share consolidations and similar events occurring during and, in some cases, after the period that change the number of shares in issue without a corresponding change in the resources of the entity, the number of shares used in the EPS calculation may not be consistent with that shown in the balance sheet. Where this is the case, disclosure should be made to that effect.

Entities are required to disclose details of all material ordinary share transactions or potential ordinary share transactions entered into after the reporting period, other than those already included in the determination of basic and diluted EPS. Such transactions should be disclosed where they would have significantly changed the number of ordinary or potential ordinary shares outstanding at the end of the reporting period. EPS for the period is not adjusted for such post balance sheet transactions. Examples of such transactions are given in IAS 33. Most of these would fail to be disclosed as material non-adjusting post balance sheet events under IAS 10.

Entities should disclose the terms and conditions of financial instruments and other contracts generating potential ordinary shares, if disclosure is not already required by IAS 32 or IFRS 7. Such disclosure might help users to understand the extent to which these instruments are dilutive and, if so, the effect they have on the disclosed diluted EPS data. Disclosure of terms and conditions is particularly relevant for those anti-dilutive securities that are not included in the computation of diluted EPS.

Presentation of EPS in statement of comprehensive income The following illustrates how Company A might present its earnings per share data in its statement of comprehensive income. Note that the amounts per share for the loss from discontinued operations are not required to be presented in the statement of comprehensive income. For the year ended 20X1 CU Earnings per ordinary share Profit from continuing operations 1.93 Loss from discontinued operations (0.33) Profit 1.60 Diluted earnings per ordinary share Profit from continuing operations 1.78 Loss from discontinued operations (0.30) Profit 1.48