IAS 33 Earnings per Share
Basic EPS divides profit or loss attributable to ordinary equity holders by the weighted average ordinary shares outstanding. Adjust for bonus elements in qualifying issues. Diluted EPS adjusts numerator and denominator for dilutive potential ordinary shares using the required instrument-specific methods. An entity presents comparative information and other disclosures as required. It is a per-share measure rather than a valuation of the whole company.
Worked example
Ordinary shareholders’ profit is $240,000 and the weighted average number of shares is 120,000. Basic EPS is $2.00 per share; diluted EPS requires a separate calculation if dilutive potential shares exist.
Common mistake
Dividing by the closing share count irrespective of issue date, or including anti-dilutive instruments in diluted EPS.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |
