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CMA Intermediate · Corporate Accounting and Auditing · Earnings per Share (Ind AS 33)

Ind AS 33 paragraph 15 deals with discount or premium on preference shares affecting the amount attributable to ordinary equity holders. What clarifying phrase did Ind AS 33 add compared with IAS 33?

Ind AS 33 clarifies that the discount or premium on preference shares is amortised to retained earnings irrespective of whether, under any law, it is debited or credited to securities premium account. Legal routing through securities premium does not remove its effect on EPS.

  1. ASuch discount or premium is amortised to retained earnings irrespective of whether it is debited or credited to securities premium account in view of requirements of any lawCorrect
  2. BSuch discount or premium must always be adjusted against securities premium account
  3. CSuch discount or premium is ignored in computing EPS if the law permits use of securities premium
  4. DSuch discount or premium is charged to other comprehensive income

Explanation

Ind AS 33 added the phrase 'irrespective of whether such discount or premium is debited or credited to securities premium account in view of requirements of any law'. This clarifies that the discount or premium is still amortised to retained earnings for EPS purposes. Using securities premium to avoid the EPS effect is therefore wrong.

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