ĐÁP ÁN IAS 33

PROBLEMS
Problem 12.1
Basic earnings per share (20x5) = 27.38 cents
Diluted earnings per share = 25.17 cents
(2) Basic earnings per share (20x4) = 6.65 cents
*$5,000,000 x 0.048
Diluted earnings per share (20x4) = 33.71 cents
Basic EPS (20x4 comparative) = 24.43 cents
Diluted EPS (20x4 comparative) = 33.71 cents x 2/3 = 22.47 cents

Problem 12.2
Basic earnings per share (20x3) = 33.33 cents
Diluted earnings per share = $5,399,123/20,187,500 = 26.74 cents

Problem 12.3
(Note: It is assumed that the ordinary share has a par value of $1 per share and the convertible
preference shares have a par value of $5. Capital structure refers only to the share capital and long-term
debt; it is differentiated from equity structure which includes retained earnings and capital reserves.)
(2) Calculation of basic earnings per share
Basic EPS = EPS (20x3) = $12,480,000/26,875,000
= 46.44 cents
Earnings per share (20x4) = $13,380,000/63,000,000 = 21.24 cents
Comparative 20x3 earnings per share in 20x4 financial statements:
Net profit/adjusted weighted average no. Of shares = $12,480,000/(26,875,000 x 2)
= 23.22 cents
Problem 12.4
Calculation of basic earnings per share:
Basic earnings per share = $7,184,000/20,000,000 = 35.92 cents
Diluted earnings per share = $8,000,000/22,566,667 = 35.45 cents
Test of anti-dilution for convertible preference shares :
Incremental earnings per share = $816,000/2,400,000 = 34 cents.

Problem 12.5
Basic earnings per share (20x1 – first half)
Basic EPS (first half) = $6,520,000/30,000,000 = 21.73 cents
Basic earnings per share (20x1 – second half)
Profit from continuing operations ($2,720,000/36,250,000) = 7.5 cents
Loss from discontinued operations (-$1,500,000/36,250,000) = (4.14) cents
Basic EPS (20x1 – full year)
Basic EPS (full year):
Profit from continuing operations ($9,240,000/33,125,000) = 27.89 cents
Loss from discontinued operations (-$1,500,000/33,125,000) = (4.53) cents
Diluted earnings per share (20x1 – first half)
Diluted EPS (first half) = $7,000,000/36,348,837 = 19.26 cents
Diluted earnings per share (20x1 – second half)
Diluted EPS (second half):
Profit from continuing operations ($2,800,000/37,852,837) (cents) = 7.40
Loss from discontinued operations (-$1,500,000/37,852,837) (cents) = (3.96)
Diluted earnings per share (20x1 – full year)
Diluted earnings per share (20x1):
Profit from continuing operations ($9,800,000/37,159,421) = 26.37 cents
Loss from discontinued operations (-$1,500,000/37,159,421) = (4.04) cents
Profit 22.33 cents

Problem 12.6
Basic EPS Basic EPS (continuing operation) = 2,560,000/25,000,000
= 10.24 cents
Basic EPS (discontinued operation) = -$3,000,000/ 25,000,000
= -12 cents
Net Loss = [-$200,000 – $240,000]/25,000,000
= - 1.76 cents
Calculation of diluted EPS (20x3)
Diluted earnings per share (continuing operation) = $2,953,916/30,875,000
= 9.57 cents
Diluted earnings per share (discontinued operation)
= -$3,000,000/30,875,000
= -9.72 cents
Diluted earnings per share (net) = ($2,953,916 - $3,000,000)/30,875,000
= -0.15 cents
Note: Although the potential ordinary shares are antidilutive (as they reduce the net loss per share)
diluted earnings per share is reported for all three components because the control number is profit
from continuing operation.
Earnings per share – 20x4
Basic EPS (20x4) = $3,496,176/ 39,850,000
= 8.77 cents
Diluted earnings per share 20x4
Diluted EPS (20x4) = 8.55 cents (convertible preference shares are antidilutive)
(2) 20x3’s comparative earnings per share in 20x4’s financial statements:
Basic EPS (adjusted for bonus element in rights issue)
Basic EPS (continuing operation) = 2,560,000/(25,000,000 x 2/1.7)
= 8.7 cents
Basic EPS (discontinued operation) = -$3,000,000/ (25,000,000 x 2/1.7)
= -10.2 cents
Net Loss = [-$200,000 – $240,000]/(25,000,000 x 2/1.7)
= - 1.50 cents
Comparative diluted earnings per share :
Continuing operation = $2,953,916/(30,875,000 x 2/1.7)
= 8.13 cents
Discontinued operation = -$3,000,000/(30,875,000 x 2/1.7)
= -8.26 cents
Diluted loss per share (net) = -0.13 cents

Problem 12.7
Basic EPS for 20x2 Increase in Add bonus Cumulative Period
Basic EPS for 20x2 $0.5871
Diluted EPS for 20x2
= $0.3573

Problem 12.8
Basic EPS for 20X2 Increase in Add shares Cumulative Period
Basic EPS for 20x2 = $1.4529
Ranking by EPIS (EPIS) EPIS
(1) Stock Options 0.00 Most dilutive
(2) Convertible Bonds 0.040
(3) Convertible Preference Shares 0.0600 Least dilutive
Basic EPS 1.452891
Reported DEPS (20X2) 0.810624

Problem 12.9
20x1
(Part 1 and 2) Restated 20x1 (Part 3) 20x2 Basic EPS 3.49 (Note 1) 1.74 (Note 3) 1.452891 Diluted
EPS 3.11 (Note 2) 1.56 (Note 4) 0.810624
Note 1: Basic EPS (20x1) = $6,970,000/2,000,000 = $3.49
Note 2: Diluted EPS (20x1) = $7,000,000 / (2,000,000 + 1,000,000 x ½ x 1/2)
= $7,000,000/2,250,000
= $3.11
2 preference shares were convertible to one ordinary share during 20x1. Hence, 1,000,000 convertible
preference shares are convertible to 500,000 ordinary
shares. Since the convertible preference shares were issued on 1 July 20x1, the assumed converted shares
are multiplied by ½.
After the share split, the exchange ratio was one to one.
Note 3: $3.49/2 = $1.74 (retrospective adjustment for share split)
Note 4: $3.11/2 = $1.56 (retrospective adjustment for share split)
Advanced Financial Accounting (Tan, Lim and Kuah)
Solutions to Chapter 12
26
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Part 4 Sapphire Ltd has fallen in profitability when the 20x2 EPS figures are compared with the restated
comparatives. The comparison should be made against the restated comparatives and not the previously
reported EPS figures. The share splits resulted in new shares issued without consideration. Even though
the profit figures have remained stable, the relative performance on a per share basis has deteriorated.
P12.10
Calculate weighted average number of ordinary shares
Time-weighting Number of shares Shares in issue 2,000,000 Less: Treasury shares (500,000) x 12/12
(500,000) 1,500,000 Shares repurchased on 31 March 20x6 (50,000)x 9/12 (37,500) Shares repurchased
on 30 September 20x6 (60,000)x 3/12 (15,000) Weighted average number of shares 1,447,500
Calculate basic earnings per share Basic EPS = Profit attributable to ordinary shareholders Weighted
average number of ordinary shares = 6,500,000 =4.49 1,447,500