Financial Reporting · Ind AS 33 Earnings per Share

Basic Earnings per Share (Ind AS 33) for CA Final

Updated 5 October 2026 · Fact-checked

Basic EPS is profit attributable to ordinary equity holders of the parent divided by the weighted average number of ordinary shares outstanding in the period. To solve it, adjust profit for preference dividends, time-weight the share movements, adjust for bonus or split, then divide.

Understand Basic Earnings per Share

Earnings per share tells an ordinary shareholder how much profit the entity earned for each ordinary share. Ind AS 33 prescribes one standard method so that EPS of different entities and periods can be compared.

The numerator is not simply profit. It is the profit or loss attributable to the ordinary equity holders of the parent entity. You start with profit or loss from continuing operations attributable to the parent, and also with total profit attributable to the parent. Then you deduct the post-tax amount of preference dividends, the differences on settlement of preference shares, and other similar effects of preference shares classified as equity. Profit attributable to non-controlling interests is not part of the numerator in consolidated accounts.

The denominator is the weighted average number of ordinary shares outstanding during the period. Shares are included from the date consideration is receivable, which is usually the date of issue. You weight each change in the share count by the fraction of the period for which those shares were outstanding. A time-weighting factor is days (or months) outstanding divided by total days (or months) in the period.

Some shares need special care. In basic EPS, partly paid ordinary shares count as a fraction of an ordinary share, to the extent they were entitled to participate in dividends relative to a fully paid ordinary share. Partly paid shares that do not participate in dividends during the period are not counted in basic EPS. They are treated like warrants or options in diluted EPS. Bonus issues and share splits are treated as if they happened at the start of the earliest period presented, so no time-weighting applies and comparatives are restated. Rights issues with a bonus element also need an adjustment, which is covered in a separate topic.

Preference dividends on non-cumulative preference shares are deducted only if declared for the period. For cumulative preference shares, the dividend for the period is deducted whether or not it has been declared, and arrears of earlier periods are not included.

Key rules to remember

Basic EPS: Basic EPS = (Profit attributable to parent's ordinary equity holders) ÷ (Weighted average number of ordinary shares outstanding); Compute it for profit from continuing operations and for total profit attributable to the parent.
Earnings for the numerator: Earnings = Profit attributable to owners of the parent − post-tax preference dividends (and other similar preference share effects); Cumulative preference: deduct the current period's dividend whether declared or not. Non-cumulative: deduct only if declared.
Weighted average shares: Σ (shares outstanding × months or days outstanding ÷ total months or days in the period); Start from the date consideration is receivable, usually the issue date.
Partly paid shares: Equivalent shares = Partly paid shares × (dividend participation relative to a fully paid share); Basic EPS includes partly paid shares only to the extent they participate in dividends. Shares that do not participate are treated like options or warrants in diluted EPS. Often the question gives the paid-up fraction as the participation.
Bonus issue or share split: Adjusted shares = Shares before the event × bonus or split factor, applied from the start of the earliest period presented; No time-weighting for the bonus portion. For a 1 for 2 bonus the factor is 1.5. Restate the comparative EPS too.

How to solve Basic Earnings per Share questions

Use the same sequence for every basic EPS question. It keeps the numerator and denominator separate and prevents missed adjustments.

1Identify the starting profit: use profit attributable to owners of the parent, after removing non-controlling interest in consolidated accounts.
2Deduct the post-tax preference dividend for the period. Check whether the shares are cumulative or non-cumulative and whether the dividend was declared.
3Write the share movements on a timeline: opening shares, issues, buybacks, bonus, split and the dates of each.
4Apply bonus issues and splits to all shares from the start of the earliest period presented. Do not time-weight them.
5Time-weight every other movement from the date consideration is receivable. For partly paid shares, count only the dividend-participating fraction.
6Add the weighted figures to get the weighted average number of shares.
7Divide the adjusted earnings by the weighted average shares. Give the answer in rupees per share, rounded as the question requires.
8If asked, restate the comparative EPS for a bonus issue or split.

Quickest way: Timeline table in three lines

When to use it: Use it when the question has several share movements and you have limited time.

Write earnings as: Profit − preference dividend. Stop and check the cumulative or non-cumulative wording.
List each block of shares as: number × months ÷ 12. Keep fractions simple, such as 9/12 or 3/12.
Add the blocks, divide, and quote the EPS. Cross-check by testing whether the weighted average lies between the opening and closing shares.

Common mistakes in Basic Earnings per Share

Not deducting preference dividend, or deducting it before tax when the question gives a post-tax figure
Students start from profit after tax and forget that preference holders rank first for dividend.
Fix: Always write the numerator as a separate line: profit attributable to the parent less preference dividend for the period.
Deducting arrears of cumulative preference dividend of earlier years
Students assume all unpaid cumulative dividends reduce current earnings.
Fix: Deduct only the current period's cumulative dividend. Arrears of earlier periods are excluded.
Time-weighting a bonus issue
The bonus issue date appears in the question and looks like any other issue date.
Fix: Treat the bonus shares as outstanding from the start of the earliest period presented. Restate the comparatives.
Counting partly paid shares as full shares
Students count the number of shares and ignore how much is paid or entitled to dividend.
Fix: Count them as a fraction of an ordinary share, based on their entitlement to participate in dividends.
Using the closing number of shares instead of the weighted average
It is quicker and balance sheet figures are easy to find.
Fix: Use the weighted average over the period, using issue dates and the total period length.
Including non-controlling interest profit in consolidated EPS
Students start from consolidated profit for the year rather than profit attributable to owners.
Fix: Use only profit attributable to the owners of the parent.

Worked examples

Example 1

For the year ended 31 March 2027, Vistara Ltd reported profit after tax of ₹48,00,000. It has 10,00,000 equity shares at the start of the year. On 1 July 2026 it issued 2,40,000 equity shares for cash. It also has 50,000 cumulative preference shares of ₹100 each carrying 8% dividend. No dividend has been declared for the year. Compute basic EPS.

Show the solution

Preference dividend for the year = 50,000 × ₹100 × 8% = ₹4,00,000. Since the shares are cumulative, deduct it even though it is not declared.
Earnings for ordinary shareholders = ₹48,00,000 − ₹4,00,000 = ₹44,00,000.
Weighted average shares: opening 10,00,000 × 12/12 = 10,00,000.
Shares issued on 1 July 2026 are outstanding for 9 months: 2,40,000 × 9/12 = 1,80,000.
Weighted average = 10,00,000 + 1,80,000 = 11,80,000.
Basic EPS = ₹44,00,000 ÷ 11,80,000 = ₹3.73 per share (rounded).

Answer: Basic EPS = ₹3.73 per share (approximately).

Example 2

Karan Industries Ltd has profit attributable to owners of ₹30,00,000 for the year ended 31 March 2027. On 1 April 2026 it had 6,00,000 fully paid equity shares. On 1 October 2026 it issued 2,00,000 equity shares of ₹10 each, of which only ₹5 per share was paid; these shares are entitled to dividends in proportion to the amount paid. On 1 January 2027 it made a bonus issue of 1 bonus share for every 2 shares held, on all shares then outstanding, with the partly paid shares counted on their dividend-participating (half-paid) equivalent basis. The bonus shares are fully paid. There are no preference shares. Compute basic EPS.

Show the solution

Opening shares: 6,00,000 × 12/12 = 6,00,000.
Partly paid shares: participation = ₹5 ÷ ₹10 = 0.5, so equivalent shares = 2,00,000 × 0.5 = 1,00,000.
Weight for 6 months (1 Oct to 31 Mar): 1,00,000 × 6/12 = 50,000.
Weighted average before the bonus = 6,00,000 + 50,000 = 6,50,000.
A 1 for 2 bonus means 50% extra shares, so the bonus factor is 1.5. It is applied to the shares outstanding before the bonus, as if issued at the start of the year, with no separate time-weighting of the bonus shares.
Weighted average after bonus = 6,50,000 × 1.5 = 9,75,000.
Basic EPS = ₹30,00,000 ÷ 9,75,000 = ₹3.08 per share (rounded).

Answer: Basic EPS = ₹3.08 per share (approximately).

Exam tips

Write the numerator and denominator as two separate workings with headings. Marks are given for each adjustment even if the final figure is wrong.
Read the preference share wording carefully: cumulative or non-cumulative, declared or not, pre-tax or post-tax.
In case-scenario MCQs, check the dates first. A one-month error in a time-weight changes the answer, and there is no negative marking, so attempt every MCQ.
State your assumptions in the written answer, such as the use of months instead of days, and the reason for treating partly paid shares as a fraction.
If the question gives comparative figures, restate them for bonus issues or splits before presenting the answer.

Practice questions from Ind AS 33 Earnings per Share

Basic Earnings per Share in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Basic Earnings per Share: frequently asked questions

What is the formula for basic EPS under Ind AS 33?

Basic EPS is profit attributable to ordinary equity holders of the parent divided by the weighted average number of ordinary shares outstanding in the period. The profit figure is after deducting preference dividends and similar effects.

Do I deduct preference dividend if it has not been declared?

For cumulative preference shares, deduct the dividend for the current period whether or not it is declared. For non-cumulative preference shares, deduct it only if it is declared for the period.

How do I treat partly paid shares in the weighted average?

Count them as a fraction of an ordinary share to the extent they are entitled to participate in dividends, compared with a fully paid share. Then time-weight that fraction from the issue date. Partly paid shares that do not participate in dividends are treated like options or warrants in diluted EPS.

Should I time-weight a bonus issue?

No. A bonus issue or share split is treated as if it happened at the start of the earliest period presented. Adjust the shares for the full period and restate the comparative EPS.