LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

EPS as per AS-20

CS Asmita Mehta (CS) (308 Points)

06 April 2009

What will be the EPS in this case:

Earnings attributable to equity share holders : Rs.100000

Number of equity share o/s during the year : 1000

(face value Rs. 10 each)

Out of above equity share on 200 shares final call money @ Rs 2 is due but not received(calls in arrears)

Indirectly what i want to know that wheather shares on which calls are due but not received will be considered for EPS calculation or not ????????

Plz give ur answer in the light of AS-20 and maintion PERA NO. if possible.......

Reply
Follow
Share

10 Replies

(Guest)

EPS will be 100000/1000 i.e. Rs.100/share.

Coz as per para 17(a) equity shares issued in exchange for cash are included when cash is receivable.

>>Vipul Garg

koolleo87 (1268 Points)
Replied 06 April 2009

Well, CIA is not subtracted from ESC for calculation of EPS.... I will post proper reference link here as soon as I get it... Looking for it.... I may be wrong...

shailesh agarwal (professional accountant) (7642 Points)
Replied 07 April 2009

as per AS-20-PARA-19-

PARTLY PAID shares are treaded as a FRACTION OF AN EQUITY SHARES to the extent that they are entitled to paticipate in dividends relative to a fully paid equity share during the reporting period

CS Asmita Mehta (CS) (308 Points)
Replied 07 April 2009

Mr. shailesh my question is not about partly paidup shares its about calls in arrear.

CS Asmita Mehta (CS) (308 Points)
Replied 07 April 2009

Krunal Raichura (Financial Advisory) (2134 Points)
Replied 07 April 2009

Please note that para 17 mentions that in most cases, shares are included in the weighted average number of shares from the date the consideration is receivable, for example: equity shares issued in exchange for cash are included when cash is receivable. It does not mentioned the word received....in your example, calls are receivable although they are not received. So, your next step is to refer to para 19.

Hope this solves your query.

Para 19 mentions that Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

For your Illustration, the number of shares for eps caclulation will be as follows-

Fully Paid Shares (A) = 800 fully paid shares

Number of partly paid shares (B) - 960

(Assuming that partly paid shares are entitled to participate in the dividend to the extent of amount paid, number of partly paid equity shares would be taken as 160 for the purpose of calculation of earnings per share. Rs 8 paid up for 200 shares, i.e. 80% of value for 200 shares which is equal to 160 shares.)

As the calls are due and not received, during the period into consideration, these shares would be entitled to dividend to the extent of paid up value. See bold + underlined words mentioned above.