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Basic earnings per share

For a group, use profit attributable to ordinary equity holders of the parent, adjusting for amounts attributable to other classes as required. Weight shares for the part of the period outstanding, with prescribed adjustments for bonus elements and certain other events. Basic EPS describes earnings per share; diluted EPS separately considers potentially dilutive ordinary shares.

Worked example

Profit attributable to ordinary shareholders is $240,000. There were 100,000 ordinary shares for the first six months and 140,000 for the next six months, issued at full market price. The weighted average is 120,000 shares, so basic EPS is $2.00 per share.

Common mistake

Dividing by closing shares regardless of issue date, using total group profit including non-controlling interests, or treating basic and diluted EPS as identical.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA FR Direct September 2026–June 2027
ACCA SBR Direct September 2026–June 2027