Outline the main contents of the International Accounting
standard 33 (IAS33) EPS
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Outline the main contents of the International Accountingstandard 33 (IAS33) EPS
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IAS33 is very broad and detailed standard that lays down theimportance and method of presentation of EPS I have tried tosummarize below the main contentEPS shows net income earned in lieu of each equity share andhelps in calculating return on equity and valuation multiples todetermine if investment should be made in companys equity sharecapital Increase in EPS over years is indicative of successfulmanagement and effective policy and decisionmaking and viceversaEarnings for ordinary shareholders are net income available afterpreferred dividend paymentsThus BEPS uses actual earnings afterpreferred stock dividends Common stock dividends are notsubtracted from net income Weighted average number of commonshares is the number of shares outstanding during the year weightedby the period they were outstanding for in a yearWhile calculating BEPSplease note thatA stock split or a stock dividendis considered to contribute to total numbers of outstanding sharesright from the beginning of the period even if they occur any timeduring the year for which EPS is being calculatedFor cumulative preferred stockonly the current years preferred dividends are subtracted in thecalculation whether or not this dividend is paid Cumulativepreferred dividends in arrears are not includedDiluted EPS DEPS is the EPS if allconvertible securities were exercised and is mathematically givenasTax rate in the
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