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

Terms of a convertible instrument issued by Sagar Foods Ltd may affect whether potential ordinary shares are dilutive and the adjustment to profit attributable to ordinary equity holders. What does Ind AS 33 paragraph 72 say about disclosing the terms and conditions of such instruments?

Ind AS 33 paragraph 72 encourages disclosure of the terms and conditions of instruments generating potential ordinary shares, if not otherwise required, with reference to Ind AS 107. It is not an absolute mandate under Ind AS 33, nor is it prohibited.

  1. ADisclosure is prohibited to protect commercial confidentiality
  2. BDisclosure is mandatory in all cases under Ind AS 33 itself
  3. CDisclosure is required only if the instrument is anti-dilutive
  4. DDisclosure is encouraged, if not otherwise required, with reference to Ind AS 107Correct

Explanation

Paragraph 72 states that such terms may determine dilution and the effect on the weighted average shares and profit adjustments. It says disclosure of the terms is encouraged, if not otherwise required (see Ind AS 107). So it is encouraged rather than mandated by Ind AS 33 itself.

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