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CA Final · Financial Reporting · Ind AS 33 Earnings per Share

Himalaya Ltd has the following in the year ended 31 March: profit attributable to ordinary equity holders Rs 9,00,000; opening ordinary shares 3,00,000; on 1 October a bonus issue of 1 share for every 3 held, with no change in resources. Prior-year reported basic EPS was Rs 2.80 on 3,00,000 shares. What are current-year basic EPS and restated prior-year EPS?

Current-year basic EPS is Rs 2.25 and prior-year EPS is restated to Rs 2.10. A bonus issue is treated as if it occurred at the start of the earliest period presented, so 4,00,000 shares apply to the full year, and the comparative is scaled by 3/4.

  1. ARs 2.25 and Rs 2.10Correct
  2. BRs 3.00 and Rs 2.80
  3. CRs 2.25 and Rs 2.80
  4. DRs 2.70 and Rs 2.10

Explanation

A bonus issue is applied retrospectively as if it occurred at the start of the earliest period, so shares are 3,00,000 x 4/3 = 4,00,000 for the full year. Current EPS is 9,00,000/4,00,000 = Rs 2.25. The prior-year EPS is restated to 2.80 x 3/4 = Rs 2.10. Time-weighting the bonus from 1 October gives wrong figures, and leaving the prior year unrestated is also wrong.

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