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EPS Comprehensive Example 25

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Ahmed Jamal
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16 views

EPS Comprehensive Example 25

Uploaded by

Ahmed Jamal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CAF 1: FINANCIAL ACCOUNTING AND REPORTING I CHAPTER 10: IAS 33 EARNINGS PER SHARE

5. COMPREHENSIVE EXAMPLES
 Example 23:
Daffodil Limited (DL) had share capital of Rs. 1,600 million (ordinary share of Rs. 10 each) as at
31 December 2015.

2017 2016
Rs. m Rs. m
Net profit for the year 660.25 331.67

Details of share issues:


 25% right shares were issued on 1 May 2016 at Rs. 18 per share.Market value was also

AT A GLANCE
Rs. 18 per share.
 A bonus issue of 10% was made on 1 April 2017 as final dividend for 2016.
 50 million right shares were issued on 1 July 2017 at Rs. 15 per share.Market Value was
Rs. 25 per share.
 A bonus issue of 15% was made on 1 September 2017 as interim dividend.
Required: Calculate the basic EPS for the year ended 31 December 2017 (including the
comparative).
 Answer:
Rs. 660.25 million
Basic EPS (2017) = = Rs. 2.26 per share
291.87 million shares
Basic EPS (2016) = 1.77 x 1/1.1 x 1/1.08 x 1/1.15 = Rs. 1.30 per share

SPOTLIGHT
Restated
Rs. 331.67 million
Basic EPS (2016) = = Rs. 1.77 per share
186.66 million shares

Date Number of Time Adjustment Weighted


shares (m) factor factor(s) average (m)
2016
1 Jan to 30 Apr 160 x 4/12 53.33
Right issue (1 May) full price 40

STICKY NOTES
1 May to 31 Dec 200 x 8/12 133.33
186.66
2017
1 Jan to 31 Mar 200 x 3/12 x 1.1 x 1.08 x 1.15 68.31
Bonus issue (1 Apr) 20
1 Apr to 30 June 220 x 3/12 x 1.08 x 1.15 68.31
Right issue (1 Jul) 50
1 Jul to 31 Aug 270 x 2/12 x 1.15 51.75
Bonus issue (1 Sep) 40.5
1 Sep to 31 Dec 310.5 x 4/12 103.5
291.87
Adjustment factor (bonus issue 1 April 10%) = 110 / 100 = 1.1

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN 365


CHAPTER 10: IAS 33 EARNINGS PER SHARE CAF 1: FINANCIAL ACCOUNTING AND REPORTING I

Adjustment factor (right issue 1 Jul) = 25 / 23.15 = 1.08


Adjustment factor (bonus issue 1 Sep 15%) = 115 / 100 = 1.15

Theoretical ex- (220m shares x Rs. 25) + (50m share x Rs. 15) Rs. 23.15
= =
rights price 220m shares + 50m shares per share
AT A GLANCE
SPOTLIGHT
STICKY NOTES

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