1. avatar says

    Hello sir,what a wonderful lecture,pls am a bit confuse,I don’t really know what this anti-dilutive is all abt,I understood the calculation but don’t no why,when,what it is all abt.pls enlighten me the more pls.

    • Profile photo of MikeLittle says

      Where a conversion takes place and the result is that earnings per share increases as a result of that conversion, then the eps has not been diluted – it has in fact been improved. And “been improved” in the language of IAS 33 is the same as saying anti-diluted. Think of concentrated orange juice (in the UK we call it orange squash or orange cordial)

      When preparing a drink, we pour some cordial into a glass and then dilute it by adding water. The water has a dilutive effect on the orange cordial

      But if we put too much water in, then the drink tastes too weak, not fruity enough. To correct that, we could add some more cordial to strengthen the taste. By adding that extra cordial, we would be correcting the effect of having added too much water so the addition of this extra cordial could be said to be anti-dilutive


    • avatar says

      hello sir, please can you help me with this eps ex5 … how do see that which loan stock is more dilutive ? .. do we look at the date when it was issued or we focus on the MEPS?

      please help

      thank you

      • avatar says

        ok that means lower the MEPS, that loan stock is more dilutive?

        secondly, i also wanted to ask if for example while calculation anti dilution, loan stock #1 was anti dilutive so we will stop with the option itself or do we take loan stock #2 and option for the calculation of diluted eps?

        thank you sir.. you are an amazing lecturer.. not only you made p2 a ‘bit’ easier for me through the lectures lol but also you have helped a lot in solving my problems. thank you so much

      • Profile photo of MikeLittle says

        Hi Shreya

        Thanks for those kind words :-)

        You need to work out (in the correct sequence) whether a loan stock conversion is dilutive or anti-dilutive

        The “correct” sequence will not always be that the first loan stock conversion is less than the second so you need to calculate MEPS for both


      • avatar says

        your welcome :)

        So that means for example while calculating anti dilution effect in “correct” sequence if i get these final figure for anti dilution effect:
        b/f (control fig) 15c
        option 0
        loan stock 1 9.5c
        loan stock 2 9.3c

        so that means after this when i will calculate Diluted Eps il take the b/f shares, options and loan stock 2 in calculation and exclude the loan stock 1 as it is anti dilutive?

        in the correct sequence it will always be that the second or the last one (if more loan stocks given) will be anti dilutive?

        thank you sir
        and also I have asked you one more ques related to IAS 41 in the ask tutor thread. please if you could help me out with that as well

        thank you sir

  2. avatar says

    Dear little Mike, Will it be possible u can record it before june 2014 any new chapter which is not recorded as i am going to sit in next june. ur my one of the best lecture ever i met. may god Bless u always. please reoly. :)

    • Profile photo of MikeLittle says

      Hi Hixam

      Substantially all the topics in those later chapters are either F7 revision or relatively straight forward. There is a revised chapter on single company reconstruction accounting – re-written last month and a bit of an amendment to consolidations – changes in group structures chapter

      Otherwise I have to rely on your own efforts for things like Revenue recognition

      • avatar says

        Dear mike,
        So from Chapter,

        17 Reconstructions 141
        18 IFRS 9 Financial Instruments 153
        19 IFRS 2 Share based payment schemes 159
        20 Report writing and interpretation of financial statements 167
        21 IAS 1 – Presentation of financial statements 173
        22 IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors 175
        23 IAS 24 Related parties (rps) 177
        24 IAS 34 Interim financial reporting – disclosures 181
        25 IAS 40 Investment properties (ip) 183
        26 IAS 12 Deferred tax (dt) 189
        27 IFRS 1 First Time Adoption of IFRS 197
        28 Management Commentary 201
        29 Small and Medium (sized) Entities – SMEs

        From this chapters, will there be any video available before next june? or shall i have to work my self? and relatively straight forward what u mean is only for chapter 16 or for those other chapter?

        thanx a lot mike, ur just gifted on earth n because of u people like us are understanding that we are studying. :)

      • Profile photo of MikeLittle says

        Hey Gingergirl – I am quite capable of answering my own messages, thank you.

        You are correct though – as I have said before (if not on this thread, then on another) Hixam, there are no plans just yet for me to record any more lectures on these “missing” topics

      • avatar says

        Sorry Mike – its just that I’ve read on here you making that same comment so often that I thought I would save you having to write it all again.


      • Profile photo of MikeLittle says

        Hixam, if you want a reply in future, post your question on the “Ask the tutor”page

        After chapter 16 there are no lectures. The lectures are recorded over 5 days – the entire length of our courses. Obviously we have to rely on students to do their own studying on those topics that are not covered in lectures. Many of the “missing” topics are F7 revision and others are relatively straight forward.

        Should you have any particular issue with any of the topics, of course you can ask for an explanation but I may well respond and say, for example, “there are two good articles in Student Accountant by Tom Clendon covering all that you need to know”

        There are no plans to record any new lectures in the near future but I am always here to answer your questions where you come up against any matter that you cannot fully understand

  3. Profile photo of annchen says

    Really wish to have some lectures over chapters 17-28, especially reconstructions and share based payments :S
    You think you can have them “on time” before the December 2013 exam…? Would really be great!

      • Profile photo of MikeLittle says

        @gts7, I’m so sorry – I answered it, but it hasn’t appeared! So here goes again.

        In the working to determine whether any conversions are anti-dilutive, we ignore the earnings from the discontinued operation because it will not contribute to profits in the future and our Global Investor wants to know the situation “going forward”

        However, the basic question is “What would this year’s EPS have been if all these conversions HAD in fact taken place this year and the profits from Vanuatu DID contribute to this year’s earnings figure.

        Is that clear?

  4. avatar says

    Hello Mr. Mike.
    Your lecture was awesome :)
    Bravo to Mr. Mike and Admin.

    However Mr. Mike, I’d be lad if you’d clear my doubt on this:

    Why is it in the final step (calculation of DEPS) the brought forward earnings are $750,000 and not $600,000 as calculated in the second last step (determining if any instruments are anti-dilutive)?
    In other words why is it that the net earnings attributable to the discontinued operation of $150,000 not deducted from the $750,000?

    Thank you very much :)

  5. Profile photo of Miss A.. says

    Sir, in December 2012 P2 notes, we have $200,000 profit from discontinued operations which is included in earnings.So earnings would be 750,000 – 200,000=550,000 so EPS of equity shares b/f would be 550,000/4000,000=13.75

    (example 5)

    am i right?

  6. avatar says

    I think that Mike is doing great, great job and his tution is really above any expectations of mine. His explanations on every topic available on this site does help to understand the paper. However, because he is doing so great job and because of his briliant way of doing tution I would very much appreciate if you (opentution tutors) could put up the rest of the paper. If not the whole rest than at least those chapters containing exercises. Thank you very much, Mike

  7. avatar says

    Mr. Little, Admin, Do u not think you have a constructive obligation to put up IAS 39? Being that you’ve previously put up all those stds that r critical in the exams? Are u not now obliged to provide us with 39 as well? Our expectations of u r high & based on your past behavior of uploading lectures

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