- This topic has 1 reply, 2 voices, and was last updated 1 year ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Earnings per share
Hi tutor,
Could you please explain what the potential ordinary share is? What the difference between ordinary share and potential ordinary share? I read the definition of potential ordinary share in the TEXT book but cannot understand what it is.
Thank you so much in advance.
Hi,
It is linked to the calculation of the diluted EPS figure and looks at where ordinary shares may potentially be issued in the future. This future issue of shares could reduce (dilute) the EPS figure so it is important to highlight this potential change to the shareholders currently.
In the exam you will only need to look at share options and convertible bonds as situations where shares might be issued in the future.
Thanks