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

Which statement about antidilutive potential ordinary shares is correct under Ind AS 33?

Antidilutive potential ordinary shares are excluded from diluted EPS. They are antidilutive when their conversion would increase earnings per share or decrease loss per share from continuing operations, so assuming their conversion would not reflect dilution.

  1. AThey are included in diluted EPS if they are issued by the entity
  2. BThey are excluded because conversion would increase EPS or decrease loss per share from continuing operationsCorrect
  3. CThey are excluded only when the entity has reported a loss
  4. DThey are included but shown separately as a deduction from diluted EPS

Explanation

Potential ordinary shares are antidilutive when conversion would increase EPS or decrease loss per share from continuing operations. The calculation of diluted EPS does not assume their conversion, exercise or issue. This applies whether the entity reports profit or loss.

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