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Hello Chris!
In your example 2, for bonus shares, why did we need to adjust the for the bonus share by assuming that the bonus are deemed to have been issued at the start of the year?
Why not assuming that due to the fact that bonus issue does not provide additional resources we do not adjust for the number of bonus shares.
In your examples, why did we not calculate EPS based on 500M shares and do not adjust for the $125 shares due the fact it does not contribute any cash?
Thanks in advance.
Hi,
You’re correct about the bonus issue not providing additional resources but it does lead to an increase in shares in issue, hence why we need to make the assumption that they have always been in issue and restate the comparatives.
I suppose that you could assume that they haven’t been issued as an alternative but it’s a bit more of an assumption given that the shares are actually in issue.
Thanks
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