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IAS 33 Earnings per Share-(Practicals Included)
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LIST OF THE PRESENT APPLICABLE AND EFFECTIVE ACCOUNTING STANDARDS:
Why this course has been designed and crafted in Q & A learning Format? How will it benefit you?
Highlights of this IFRS course:
How can you learn IAS 33?
IAS 33 Earnings per Share ( SURFACE )
What is the objective of IAS 33?
What is the scope of IAS 33?
What do you understand by Basic Earnings?
What is the need for basic earning per share information?
What do you understand by ordinary share? Explain dilution in regards to it?
How is basic earning calculated?
What are the factors to be considered while calculating Basic Earnings i.e.BEPS?
What do you mean by Diluted earnings?
State the presentation and disclosures related to IAS 33?
IAS 33 Earnings per Share ( DEPTH )
What are the key differences between basic EPS and diluted EPS, and why is it important to understand these differences?
How can companies use EPS information to evaluate their financial performance and compare themselves to other companies in the same industry or sector?
What are some of the challenges that companies may face when calculating diluted EPS, and how can these be overcome?
How does IAS 33 impact the way that companies structure their financing and capital-raising activities?
How can companies use EPS information to inform their dividend policies and decisions?
What are some of the common mistakes that companies make when calculating and disclosing EPS, and how can these be avoided?
How can investors use EPS information to make informed investment decisions, and what are some of the limitations of this metric?
How does IAS 33 relate to other key accounting standards, such as IFRS 9, IFRS 15, and IFRS 16?
How do changes in accounting policies or methods impact the calculation and disclosure of EPS, and what steps can companies take to ensure compliance with IAS 33 in these situations?
How can companies ensure that their EPS calculations and disclosures are accurate, reliable, and in compliance with IAS 33?
What factors need to be considered when calculating basic EPS under IAS 33, and what adjustments may need to be made to the calculation?
How do potential dilutive securities impact the calculation of diluted EPS, and what methods are used to account for these securities?
How does IAS 33 relate to other accounting standards and regulations, such as IFRS and local securities laws?
How can companies use EPS information to evaluate their financial performance and make informed decisions about capital allocation and investor relations?
What are some common challenges or issues that companies may face when implementing IAS 33, and how can these be addressed?
How has IAS 33 evolved over time, and what are some potential future developments in this area?
What are some best practices for companies to follow when calculating and disclosing EPS under IAS 33, and how can they ensure compliance with this standard?
EVOLUTION OF ACCOUNTING STANDARD AND ITS FUTURE DEVELOPMENT
How has IAS 33 evolved over time, and what are some potential future developments in this area?
IFRS: AS AN AUDITOR!
What you need to know about IAS 33 as an auditor?
What are the key considerations for auditors in relation to IAS 33?
IFRS & ACCOUNTING RATIOS:
What all Accounting Ratios does IAS 33 connects which may get affected?
Examples of how the application of IAS 33 can impact various accounting ratios:
Table summarizing how the application of IAS 33 can impact various accounting ratios:
IAS INTERACTION WITH OTHER ACCOUNTING STANDARDS!
What do you understand by interaction of accounting standards and why are they important to be understood in general?
How IAS 33 does interacts with other accounting standards?
What do you understand by interaction of accounting standards and why are they important to be understood?
How can one approach towards understanding the interaction between accounting standards?
What if one fails to understand the interaction of accounting standards? How does it impact financial reporting?
Interaction of IAS 33 with other accounting standards: TABULATION!
CLIMATE IMPACT: IAS 33
Discuss the possible climate impact on IAS 33:
How can the climate impact on IAS 33 be mitigated?
TEST YOUR UNDERSTANDING ! -IAS 33 Earnings per Share
QUIZ: TEST YOUR UNDERSTANDING ! IAS 33 Earnings per Share
IAS 33 Earnings per Share - PRATICAL ILLUSTRATIONS
QUESTION 1 Illustration 1 ABC Company issues 9% preference shares of FV of $ 10 each on 01.04.2015. Total value of the issue is $ 10,00,000. The shares are issued at a discount of $ 0.50 each, for a period of 5 years and would be redeemed at the end of 5th year. The shares are to be redeemed at $ 11 each. At the end of the year 3, i.e. on 31.03.2018, company finds that it has earned good returns than expected over last three years and can make the redemption of preference shares early. To compensate the shareholders for two years of dividend which they need to forego, company decided to redeem the shares at $ 12 each instead of original agreement of $ 11. Comment on the earnings for the year 2017-18.
QUESTION 2 Illustration 2 Following is the data for company XYZ in respect of number of equity shares during the financial year 2017-18. Find out the number of shares for the purpose of calculation of basic EPS as per IAS 33. S.No. Date Particulars No of shares 1 01-Apr-2017 Opening balance of outstanding Equity Shares 100,000 2 15-Jun-2017 Issue of Equity Shares 75,000 3 08-Nov-2017 Conversion of convertible Preference Shares in Equity 50,000 4 22-Feb-2018 Buy back of shares (20,000) 5 31-Mar-2018 Closing balance of outstanding Equity Shares 205,000
QUESTION 3 Illustration 3 The company issued bonus shares on 1st January 2018. What will be its impact on Basic EPS?
QUESTION 4 Illustration 4 ABC Company wants to calculate diluted EPS for the year 2017-18. The weighted average number of ordinary shares are 5,00,000 as on 31.03.2018. Company has provided following details about the potential ordinary shares. 1. On 1 April 2013 company has issued convertible preference shares for a period of 10 years. The face value of the share is $ 10 each and total value of preference share capital is $ 75,00,000 2. On 1 January 2015 company has issued convertible debentures having a face value of $ 10 each for a period of 3 years. The total value of debenture issue is $ 90,00,000. After completion of third year the debentures will be converted into equity shares. 3. Company issued convertible preference shares 15th November 2017, for a period of 5 years, having a face value of $ 10 and issue value of $ 60,00,000 Calculate the weighted average number of potential shares.
QUESTION 5 Illustration 5 Situation 1: In the money (dilutive) Company has issued 500 options, with an exercise price of $ 40 each. The average market price of the shares during the period was $ 50 each. Find out whether the options will be treated as dilutive or not?
QUESTION 6 Illustration 6 Situation 2: Out of money option Company has issued 500 options, with an exercise price of $ 40 each. The average market price of the shares during the period was $ 25 each. Find out whether the options will be treated as dilutive or not?
QUESTION 7 Illustration 7 ABC Company has issued contingently issuable shares on 1st January 2018. The condition to be satisfied is the average turnover of the company for last three quarters must exceed $ 100 million. If the condition is satisfied the company will issue the shares within a period of 6 months. The conditions will be effective from the quarter ending 31st March 2018. Company achieves the said target on ending 31st December 2018. Explain what will be the status of shares while calculating diluted EPS?
QUESTION 8 Illustration 8 ABC Company appoints CA X as CFO of the company on 1st July 2017. The company enters into an agreement with CA X that the company would issue 1000 shares to her, if she can achieve the 20% rise in the market value of the share by end of 1 year of her appointment. The current market value of the share is $ 500 per share. What will be the status of the shares for calculation of EPS, for the year 2017-18 and 2018-2019 assuming the prices of the shares are as follow: On 31st March 2018 $ 620 On 30th June 2018 $ 610 What if, the expected market value of the shares is not achieved either on 31st March or 30th June?
QUESTION 9 ABC Company issues 12% preference shares of FV of $ 10 each on 01.04.2017. Total value of the issue is $ 20,00,000. The shares are issued at a discount of $ 0.60 each, for a period of 6 years and would be redeemed at the end of 6th years. If the discount is adjusted against the preference dividend calculate how much amount will be deducted from profit after tax or the calculation Earnings for EPS.
QUESTION 10 Company has 10%, 20,000 preference shares of $ 10 each, to be repaid on 31.03.2018. Company repays the preference shares with a premium of $ 1.50 each. Find out the amount of dividend that need to be added to the profit after tax for calculation of basic EPS for the year 2017-18.
IAS 33 Earnings per Share - PRATICAL PROBLEMS WITH CALCULATION !
QUESTION 1 Given below are Equity Shares information and net profit of X Inc: Particulars No. of Shares in million Equity Share Capital of $ 10 each as on 1.1.2017 100 New Issue of Shares of $ 10 each as on 1.7.2017 100 Consolidated Net Profit for 2017 ($ In Million) 600 Non-controlling Interest 30% Calculate EPS.
QUESTION 2 A Inc has 500 Million equity shares as on 01.01.2017 as well as on 31.12.2017. Its net profit for the year 2017 is $ 600 million. Effective tax rate of the entity is 30%. It has 100 million 5% Convertible Debentures of $ 40 which is convertible into 5 equity shares. Non-controlling interest is 30%. Calculate EPS.
QUESTION 3 Let us reconsider the data given in Question 2 except that only 1 ordinary share will be issued against each debenture. Calculate EPS.
QUESTION 4 Given below is the capital structure of a company as on 31.12.2017: Exercise price of the stock option is $ 40 and the fair value of the ordinary shares is $ 60. Effective Tax rate 30%. Convertible Preference Shares are convertible into one ordinary share. Preference dividend is subject to 10% distribution tax. Convertible debentures can be converted into 3 equity shares. Net profit for the year attributable to ordinary shares is $ 200 million.
QUESTION 5 Given below are equity shares information and net profit of B Inc (in million). Particulars No. of Shares Amount in $ Equity Share Capital as on 01.01.2016 100 100 New issue as on 01.01.2017 50 50 Net Profit for 2016 $ 400 Million Net Profit for 2017 $ 500 Million The company issues 1:5 bonus shares effective 01.11.2017 one share for every 5 shares held.
QUESTION 6 M Inc has issued 1 right share for every 5 shares held on 1st May 2017. The relevant information relating to basic EPS computation is as follows: Particulars 2016 2017 No. of ordinary shares (in Million) 500 600 Net Profit for the year (in Million $) 800 900 Share price as on 30.4.2017 ($) 20 Exercise price of the right ($) 12 . Find the THEORETICAL VALUE (EX-RIGHT PER SHARE)
QUESTION 7 Given below is Equity Shares information and net profit of X Inc. Find out its basic EPS in accordance with Para 10 of IAS 33. (in million) Particulars No. of Shares Amount Ordinary Shares as on 01.01.2017 100 New Issue of Shares on 01.07.2017 100 Non-redeemable non-cumulative preference shares rate of dividend 4% a) Face value per share (in $) 10.00 b) Issue price per share (in $) 7.80 10 78 Net Profit for 2017 (in $) 400 How should the company find out net profit attributable to equity shareholder and compute basic EPS?
IAS 33 Earnings per Share- Exam Related Technical Points
IAS 33 Earnings per Share- Exam Related Technical Points
How can one TEACH IAS 33?
IAS 33 Earnings per Share- PPT PRESENTATION- COURSE NOTES
IAS 33 Earnings per Share- PPT PRESENTATION- COURSE NOTES
A real-world example under IAS 33:
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