|
Commission Regulation
(EC) No 2238/2004 of 29 December 2004 amending
Regulation (EC) No 1725/2003 adopting certain
international accounting standards in accordance with
Regulation (EC) No 1606/2002 of the European Parliament
and of the Council, as regards IASs IFRS 1, IASs Nos 1
to 10, 12 to 17, 19 to 24, 27 to 38, 40 and 41 and SIC
Nos 1 to 7, 11 to 14, 18 to 27 and 30 to 33
Content |
|
- |
Diluted Earnings per
Share
30. An entity shall
calculate diluted earnings per share amounts for profit
or loss attributable to ordinary equity holders of the parent
entity and, if presented, profit or loss from continuing
operations attributable to those equity holders.
31. For the purpose
of calculating diluted earnings per share, an entity shall
adjust profit or loss attributable to ordinary equity holders
of the parent entity, and the weighted average
number of shares outstanding, for the effects of
all dilutive potential ordinary shares.
32. The objective of
diluted earnings per share is consistent with that of basic
earnings per share—to provide a measure of the interest of
each ordinary share in the performance of an entity—while
giving effect to all dilutive potential ordinary shares
outstanding during the period. As a result:
(a) profit or loss
attributable to ordinary equity holders of the parent entity
is increased by the after-tax amount of dividends and interest
recognised in the period in respect of the dilutive potential
ordinary shares and is adjusted for any other changes in
income or expense that would result from the conversion of the
dilutive potential ordinary shares; and
(b) the weighted
average number of ordinary shares outstanding is increased by
the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
Earnings
33. For the purpose
of calculating diluted earnings per share, an entity shall
adjust profit or loss attributable to ordinary equity holders
of the parent entity, as calculated in
accordance with paragraph 12, by the after-tax
effect of:
(a) any dividends or
other items related to dilutive potential ordinary
shares deducted in arriving at profit or loss attributable
to ordinary equity holders of the parent entity as
calculated
in accordance with paragraph 12;
(b) any interest
recognised in the period related to dilutive potential
ordinary shares; and
(c) any other
changes in income or expense that would result from the
conversion of the dilutive potential ordinary shares.
34. After the
potential ordinary shares are converted into ordinary shares,
the items identified in paragraph 33(a)-(c) no longer arise.
Instead, the new ordinary shares are entitled to participate
in profit or loss attributable to ordinary equity holders of
the parent entity. Therefore, profit or loss attributable to
ordinary equity holders of the parent entity calculated in
accordance with paragraph 12 is adjusted for the items
identified in paragraph 33(a)-(c) and any related taxes. The
expenses associated with potential ordinary shares include
transaction costs and discounts accounted for in accordance
with the effective interest method (see paragraph 9 of IAS 39 Financial
Instruments: Recognition and Measurement, as
revised in 2003).
35. The conversion
of potential ordinary shares may lead to consequential changes
in income or expenses. For example, the reduction of interest
expense related to potential ordinary shares and the resulting
increase in profit or reduction in loss may lead to an
increase in the expense related to a non-discretionary
employee profit-sharing plan. For the purpose of calculating
diluted earnings per share, profit or loss attributable to
ordinary equity holders of the parent entity is adjusted for
any such consequential changes in income or expense.
Shares
36. For the purpose
of calculating diluted earnings per share, the number
of ordinary shares shall be the weighted average number of
ordinary shares calculated in accordance with paragraphs
19 and 26, plus the weighted average number of
ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary
shares into ordinary shares. Dilutive potential ordinary
shares shall be deemed to have been converted into
ordinary shares at the beginning of the period
or, if later, the date of the issue of the potential
ordinary shares.
37. Dilutive
potential ordinary shares shall be determined independently
for each period presented. The number of dilutive potential
ordinary shares included in the year-to-date period is not a
weighted average of the dilutive potential ordinary shares
included in each interim computation.
38. Potential
ordinary shares are weighted for the period they are
outstanding. Potential ordinary shares that are cancelled or
allowed to lapse during the period are included in the
calculation of diluted earnings per share only for the portion
of the period during which they are outstanding. Potential
ordinary shares that are converted into ordinary shares during
the period are included in the calculation of diluted earnings
per share from the beginning of the period to the date of
conversion; from the date of conversion, the resulting
ordinary shares are included in both basic and diluted
earnings per share.
39. The number of
ordinary shares that would be issued on conversion of dilutive
potential ordinary shares is determined from the terms of the
potential ordinary shares. When more than one basis of
conversion exists, the calculation assumes the most
advantageous conversion rate or exercise price from the
standpoint of the holder of the potential ordinary shares.
40. A subsidiary,
joint venture or associate may issue to parties other than the
parent, venturer or investor potential ordinary shares that
are convertible into either ordinary shares of the subsidiary,
joint venture or associate, or ordinary shares of the parent,
venturer or investor (the reporting entity). If these
potential ordinary shares of the subsidiary, joint venture or
associate have a dilutive effect on the basic earnings per
share of the reporting entity, they are included in the
calculation of diluted earnings per share.
Previous |
Index |
Next
|
