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

Kaveri Pharma Ltd issued shares at a discount and the discount is amortised each year. In computing basic EPS, the company debited the annual amortisation of the discount to securities premium account as permitted by company law, and so did not charge it to profit or loss. How should this be treated for basic EPS under Ind AS 33?

The amortisation must be deducted when computing earnings attributable to ordinary equity holders for basic EPS. Ind AS 33 states that such discount or premium is amortised to retained earnings irrespective of whether law requires it to be debited or credited to securities premium account, so bypassing profit or loss does not avoid the deduction.

1. AIgnore it, since it was not charged to profit or loss
2. BTreat it as a deduction only from other comprehensive income
3. CAdd it back to profit attributable to equity holders
4. DDeduct it in arriving at profit or loss attributable to ordinary equity holders, irrespective of whether it is debited to securities premium account under lawCorrect