Bonus adjustment factor in earnings per share
For a pure bonus issue, the factor is the number of shares after the issue divided by the number before it. Apply the required IAS 33 adjustment to relevant periods as if the bonus shares had been outstanding from the start of the earliest period presented. For a rights issue with a bonus element, calculate the factor as pre-issue fair value per share divided by the theoretical ex-rights price. Distinguish the factor from the number of new bonus shares alone.
Worked example
A company issues one bonus share for every two existing shares. The number of shares rises from 2 to 3 for each original holding, so the EPS adjustment factor is 3 ÷ 2 = 1.5. Adjust relevant prior share denominators accordingly.
Common mistake
Using one new share divided by two old shares, 0.5, as the full adjustment factor rather than including the original shares.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |