Earnings Per Share.ppt

1、IAS33 Earnings Per Share,Syllabus C11g,EPS = / , Net profit or loss attributable to ordinary shareholders Net profit or loss（excluding income tax and non-controlling interest）X Less：irredeemable preferred share dividends （X） X Weighted average number of ordinary shares outstanding during the period

2、total number of shares outstanding * time-weighting factor 1.1 1000 6/12 =500 7.1 1200 3/12 =300 10.1 900 3/12 =225 1025 shares Or 1000 + 200*6/12 300*3/12 = 1025 shares,2,Basic EPS,Not considering the potential effect of potential ordinary shares Denominator should be adjusted for the events that m

3、ake the number of shares actually change + Issue of shares at full market price + Bonus issue (Stock dividends) + Right issue Bonus element Element of issuing shares at ex-right price + Issue share to acquire subsidiaries +Actual conversion of convertible loan stock or convertible preferred shares +

4、Actual exercise of options or warrants + Share split - Reverse share split - Redemption and repurchase of shares,3,Continued,Adjustment method for the events in which the shares are issued for no consideration Restate the number of shares for all periods not considering the time of issue Comparative

5、 figures for previous period (adjusted EPS) = Earnings/adjusted number of shares = unadjusted EPS *adjusting factor =,4,Continued,Assuming that the value of share issued is constant Adjusted number of shares*price after issue = unadjusted number of shares*price before issue Adjusting factor = unadju

6、sted number of shares/adjusted number of shares = price after issue/ price before issue,5,Issue of shares at full market price _Example 1, p415,BEPS(2007)=460/800 = 57.5c BEPS(2008)=550/ 900= 61.1c WANOSO = 1/2* (800+1000) =900,6,31 Dec 20 x7,31 Dec 20 x8,1 July,800,1000,Test 1,p416,($000),Bonus iss

7、ue _Example 3, p417,Bonus issue 1 for 5 = Adjusting factor=5/6 BEPS(2008)=550/ 1200= 45.8c BEPS(2007) =460/ 1200 = 38.3c Restated number=1000*6/5=1200 =46c *(5/6) = 38.3c EPS before bonus issue=460/ 1000=46c,7,31 Dec 20 x7,31 Dec 20 x8,1 July,1000,1200,1200 restated,Test 2,p418,($000),Right issue _E

8、xample 4, p419,Right issue 1 for 2 , Exercise price=$1.5 Cum right price=$3 = Ex-right price=(2*$3+1*$1.5)/(2+1)=$2.5,8,31 Dec 20 x7,31 Dec 20 x8,1 July,800,1200,960 restated,Bonus element 160 Element of issuing shares at ex-right price 400*$1.5/$2.5= 240 400,Continued,BEPS(2008)=550/ 1080= 50.9c WA

9、NOSO = 1/2* (960+1200) =1080 BEPS(2007) =460/ 960 = 47.9c Restated number=800+160 or =800*$3/$2.5=960 =57.5c *(5/6) = 47.9c EPS before right issue = 460/ 800=57.5c Adjusting factor =$2.5/$3 or = 800/960 =5/6,Test 3,p421,($000),Diluted EPS,Considering the potential effect of potential ordinary shares

10、 Convertible loan notes Convertible preferred stock Options or warrants Not to examine Two or more kinds of potential ordinary shares exist at the reporting date. Anti-dilutive,10,Continued,Adjust the income for the effect, net of tax of: (a) the amount of dividends or other items associated with po

11、tential ordinary shares with dilutive effect that has been deducted to obtain the result for the period; (b) any right recognized in the period to exercise stock with potential dilutive effect, and (c) any other change in income or expenses in the period that would result from the conversion of pote

12、ntial ordinary shares with a dilutive effect.,11,Continued,Adjust the number by adding the weighted average number of ordinary shares that would be issued in case of making all potential ordinary shares with effect dilutive ordinary shares. Potential ordinary shares with dilutive effect is understoo

13、d to have been converted into ordinary shares at beginning of period or, if later, at the date of issue of potential ordinary shares.,12,Continued,The number of shares to be issued by the conversion of potential ordinary shares with dilutive effect will be determined depending on the conditions of p

14、otential ordinary shares. Where there is more than a base for conversion, will be used in calculating the exchange ratio or exercise price more advantageous to the holder of potential ordinary shares. It is considered that the alleged amounts of options and warrants, to proceed with the issuance of

15、common shares are equal to the average market price during the same period.,13,Continued,The difference between the number of common shares issued and the number of shares that were issued to the average market price of ordinary shares during the period, is treated as an issue of ordinary shares gra

16、tuitously. These shares are presumed to be reasonably valued and have no dilutive effect or anti-dilusive are ignored in calculating DEPS. These shares do not generate any income and have no effect on the result for the period. Therefore, these shares are dilutive effect and added to the number of s

17、hares outstanding for calculating DEPS.,14,Continued,15,Convertible bonds _Example 5, p423,Preferred dividends = $50 DEPS(2002)=(700-50+70)/ 5550= 13.0c Max. number of shares convertible= (1250/100)*124=1550 WANOSO(2002) = 4000+1550 = 5550 After-tax interest on bonds = 1250*8%*(1-30%)=70 DEPS(2001)=

18、(641.773-50+52.5)/ 5162.5= 12.5c WANOSO(2001) = 4000*1/4+5550*3/4 = 5162.5 After-tax interest on bonds = 70*3/4 =52.5,16,31 Dec 20 x1,31 Dec 20 x2,1 April,4000,Test 4,p425,Maximum No. = 1550,($000),Options and warrants _Example 6, p426,BEPS(2007)= 500/ 4000= 12.5c DEPS(2007)= 500/ (4000+333)= 11.5c

19、Average price $3, exercise price $2 Adjustment for number of shares = 1000 1000*$2/$3 =333,17,1 Jan 20 x7,31 Dec 20 x7,4000,Test 5,p427,Option1000 shares,($000),5b, Jun06(练习册19b),18,Presentation,Earnings per share, basic and diluted for the result for the year from continuing activities for each cla

20、ss of shares having different rights on the distribution of the gains of the period. submit the figures with the same detail for all periods for which this financial information. Earnings per share basic and diluted for the discontinued operation An entity shall present basic earnings per share and

21、diluted, even if the amounts are negative.,19,Disclosure,(a) the amounts used as numerators, and a reconciliation of those amounts; (b) the weighted average number of ordinary shares used as denominator, and a reconciliation of the denominators between them; (c) instruments that could potentially di

22、lute basic earnings per share in future, but have not been included in the calculation of earnings per diluted share because they have effects anti-dilusive in the period or periods reported;,20,Continued,(d) a description of transactions with shares or potential ordinary shares, which take place after the reporting date that would have significantly changed the number of ordinary shares or ordinary shares potential movement at the end of the period if those transactions had taken place before the end of the period for which information is given.,21,