Impact of Bonus Issue, Right Issue, and Early Redemption of Preference Share on Basic Earning Per Share
- News|Blog|Account & Audit|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 2 May, 2024
Latest from Taxmann
To calculate basic earnings per share profit or loss attributable to ordinary equity holders of the parent entity (the numerator) shall be divided by the weighted average number of ordinary shares outstanding (the denominator) during the period.
In this regard, the amounts attributable to ordinary equity holders of the parent entity in respect of profit or loss from continuing operations attributable to the parent entity; and profit or loss attributable to the parent entity shall be the amounts 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.
Furthermore, if any item of income or expense that is otherwise required to be recognized in profit or loss in accordance with Ind AS is debited or credited to securities premium account/other reserves, the amount in respect thereof shall be deducted from profit or loss from continuing operations for the purpose of calculating basic earnings per share.
But, in some cases, it may be observed that there is no change in the resources of the company but the number of ordinary equity shares may be increased or decreased. This can happen in the case where the company has issued bonus shares, Right issue, share split, and reverse share split.
In this story, we have discussed the treatment of a premium paid on the early redemption of preference shares where the company has charged such premium to retained earnings and the impact of the issue of bonus shares and right shares in the calculation of earnings per share according to Ind AS 33.
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
