Scribd
Upload
112 views15 pages

Accounting Standards 20

This document provides information on accounting standard 20 related to earnings per share calculations. It defines basic EPS as net profit divided by weighted average outstanding shares, and diluted EPS as net profit adjusted for dilutive potential shares divided by weighted average outstanding shares plus potential dilutive shares. It also includes a case study calculating basic and diluted EPS for IFCI for years 2003-2004, showing a basic and diluted loss per share of Rs. 51.28 and Rs. 51.28 for 2004, and Rs. 4.78 and Rs. 4.78 for 2003.

Uploaded by

suman_007
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
112 views15 pages

Accounting Standards 20

This document provides information on accounting standard 20 related to earnings per share calculations. It defines basic EPS as net profit divided by weighted average outstanding shares, and diluted EPS as net profit adjusted for dilutive potential shares divided by weighted average outstanding shares plus potential dilutive shares. It also includes a case study calculating basic and diluted EPS for IFCI for years 2003-2004, showing a basic and diluted loss per share of Rs. 51.28 and Rs. 51.28 for 2004, and Rs. 4.78 and Rs. 4.78 for 2003.

Uploaded by

suman_007
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 15

IIPM- PROJECT

AVIJIT SAHA
VISHAL SAHA

Accounting standards 20
Accounting standards 20
Earning per share
issued by the Council of the Institute of Chartered
Accountants of India
comes into effect in respect of accounting periods
commencing on or after 1-4-2001
Is mandatory in nature from that date, in respect of
enterprises whose equity shares or potential equity
shares are listed on a recognised stock exchange in
India.
Objective
 to prescribe principles for the determination and
presentation of earnings per share which will improve
comparison of performance among different
enterprises for the same period and among different
accounting periods for the same enterprise.
Scope
This Standard should be applied by all companies.
However, a Small and Medium Sized Company, as
defined in the Notification, may not disclose diluted
earnings per share (both including and excluding
extraordinary items).
In consolidated financial statements, the information
required by this Statement should be presented on the
basis of consolidated Information 20
Scope
In the case of a parent (holding enterprise), users of
financial statements are usually concerned with, and
need to be informed about, the results of operations of
both the enterprise itself as well as of the group as a
whole. Accordingly, in the case of such enterprises, this
Standard requires the presentation of earnings per
share information on the basis of consolidated financial
statements as well as individual financial statements of
the parent. In consolidated financial statements, such
information is presented on the basis of consolidated
information.
Presentation
An enterprise should present basic and diluted
earnings per share on the face of the statement of
profit and loss for each class of equity shares that has a
different right to share in the net profit for the period.
An enterprise should present basic and diluted
earnings per share with equal prominence for all
periods presented.
This Standard requires an enterprise to present basic
and diluted earnings per share, even if the amounts
disclosed are negative (a loss per share).
Types of EPS
BASIC EPS
DILUTED EPS
Basic earning per share
For calculating basic earning per share, the number of
equity shares should be the weighted average number
of equity shares outstanding during the period.
The weighted average number of equity shares
outstanding during the period reflects the fact that the
amount of shareholders' capital may have varied
during the period as a result of a larger or lesser
number of shares outstanding at any time.
Calculation of basic eps
Basic eps= net profit or loss for the period attributable
to equity shareholders/ weighted average number of
equity shares outstanding during the period.
Bonus issues, shares split, reverse share split, right
issue, partly paid shares and consolidations of shares
are to be taken at equivalent.
Diluted earnings per share
For the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable
to equity shareholders and the weighted average
number of shares outstanding during the period
should be adjusted for the effects of all dilutive
potential equity shares.
Calculation of diluted eps
Diluted eps= diluted net profit or loss for the period
attributable to equity shareholders/the weighted
average no of equity shares including shares issued on
conversion of all the dilutive potential equity shares
outstanding during the period.
Case Study- IFCI Annual Report 2003-04
Basic Earnings per share (Rs. in million)
31.03.2004 31.03.2003
(a) Profit/ (Loss) Computation for
equity shareholders
Net profit/ (Loss) as per P& L A/c(32,297.81) (2,596.97) Less:
Preference Dividend (456.02) (456.02)
Net profit/(Loss) for equity (32, 753.83) (3052.99)
shareholders
(b) Weighted average no. of equity
shares o/s during the year 638,675,762 638,675,762
Case Study- IFCI Annual Report 2003-
04
Diluted Earnings per share (Rs. in million)
31.03.2004 31.03.2003
(a) Profit/ (Loss) Computation for
equity shareholders(including
potential shareholders)
Net profit/ (Loss) as per P& L A/c (32,297.81) (2,596.97) Less:
Preference Dividend (456.02) (456.02)
Add: Intt on Conv. Debentures. 570 485.43
Net profit/(Loss) for equity (32, 183.83) (2567.56)
shareholders(including
potential shareholders)
(b) Weighted average no. of equity
shares o/s during the year as per
basic EPS 638,675,762 638,675,762
Add: Potential no. of equity shares (CD)2375303000 2464305000
Weighted average no. of equity 3013978762 3102980762
shares o/s during the year
Case Study- IFCI Annual Report 2003-
04
(Rs. in million)
31.03.2004 31.03.2003

Basic Earnings per share (51.28) (4.78)

Dilutive Earnings per share* (51.28) (4.78)

* Since the convertible debentures are anti dilutive, they


have been ignored in the computation of diluted EPS.
THANKYOU!!!

You might also like