Transcript Document

AS-20 Earning Per Share
EPS
1. EPS can be of two types :
a) Basic EPS
b) Diluted EPS
2. Basic EPS =
Earning Attibutable to Eq. Share Holder (EAESH)
Wt. Avg. of Eq Share Outstanding during the Year
Weight here refers to Time
3. Earning Attributable to Eq. Share Holder :
PBIT
Less: Interest on Debenture / Borrowing
PBT
Less: Tax
PAT
Less: Preference Dividend (Note)
Earnings
+++++
+++++
=====
+++++
=====
+++++
=====
Note :
i)
ii)
iii)
iv)
v)
vi)
Preference Dividend or Cumulative Preference share
will be deducted even if not declared.
If question is silent Preference Share as Cumulative
Preference Share.
Preference Dividend on Non Culmulative Preference
Share will be deducted if declared.
Reserves will not be deducted in EAESH.
Prior period items and Extra Ordinary items will be
adjusted while calculating PAT.
CDT / DDT wil be charged on Pref Dividend if
specified.
CDT = Corporate Dividend Tax
DDT= Div. Distribution Tax
Note: Only Pref. Dividend on Non Cumulative Pref Share will not be deducted if not
declared.
4. How to calculate Wt. Avg. of No. of Equity
Share Outstanding during the period ?
Weighted Avg is done using weight of time.
Outstanding means shares which have been
issued by company.
Whenever any company issue share whose
resources have been received than wt. Avg is
done for paid up value received.
5. Treatment of Public Issue
Since shares issued in case of public issue are at
appropriate price,
share are considered from the date when paid up capital
have been received.
Date of issue of shares is relevent for weighted average.
6. Treatment of Bonus Share
Bonus Share are at NIL price.
Since resources are not received in bonus hence
such shares do not effect Earning Pattern.
Date of issue of Bonus is not relevant.
( Since Resources are not received)
In case of Bonus, Previous Year(s) reported in
current year will be restated taking into account
bonus shares.