EPS AS 20

Anyone can tell how to calculate EPS in case of Bonus issue. Bonus shares is issued in January Month.
Tell both EPS I.e basic and Diluted
Replies (8)
Quick Summary
This discussion clarifies how to calculate Earnings Per Share (EPS) when bonus shares are issued, according to AS 20. It explains that bonus issues affect both basic and diluted EPS and require restatement of prior periods. The calculation involves adjusting the weighted average number of outstanding shares from the beginning of the reporting period, regardless of the bonus issue date.

EPS doesn’t change. Calculate bonus and sum up your outstanding shares. Then derive eps. 

Ok, whether there is change in Diluted Shares Calculation and also previous year EPS aslo to be restated?

Bonus issue, rights have impact on eps only and not on diluted eps. 

Bonus issue on 01-10-2011 = 2 (new): 1(old). Calculate EPS for the year 2011 and adjusted EPS for the year 2010. Solution: As per AS 20, when bonus shares are issued during the year, it should be calculated in the weighted average from the beginning of reporting period irrespective of issue date

It is the formula and eps and diluted EPS are different ly presented andcalculated becuz diluted takes into account convertible bonds, preference share and options. 

Oops I made err, Potential equity shares that have been converted into equity
shares during the reporting 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 equity shares.

First calculate basic eps based on profit and outstanding shares.

Next, add additional converted shares to above outstanding shares and profit to calculate diluted EPS.

This means, bonus and rights are included from previous year, and this year while calculating basic EPS. And this share number is used in calculating diluted EPS by adding addional diluted shares. So yes, bonus and rights do effect eps and diluted EPS.

Coming to answer your restatement, both eps will be restated and the weighted average shares for the next year holds this years diluted shares plus equity shares. I can't understand the second para below.

 

If the number of equity or potential equity shares outstanding
increases as a result of a bonus issue or share split or decreases as a
result of a reverse share split (consolidation of shares), the calculation of
basic and diluted earnings per share should be adjusted for all the periods
presented. If these changes occur after the balance sheet date but before
the date on which the financial statements are approved by the board of
directors, the per share calculations for those financial statements and
any prior period financial statements presented should be based on the
new number of shares. When per share calculations reflect such changes
in the number of shares, that fact should be disclosed. 
45. An enterprise does not restate diluted earnings per share of any prior
period presented for changes in the assumptions used or for the conversion
of potential equity shares into equity shares outstanding.

Does anyone know that a company can purchase a building or machinery in lieu of shares and include it in diluted EPS?

Consideration payable/average price of share= shares issued

 

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