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ACCA Strategic Professional · Strategic Business Reporting (International) · Other reporting issues

Which statement about IAS 33 is correct?

The correct statement is that dilution is tested against profit from continuing operations, the control number. Potential shares that would increase EPS from continuing operations are antidilutive and excluded, basic EPS uses weighted average shares, and post-year-end bonus issues still require restatement.

  1. AA potential ordinary share is dilutive only if conversion would reduce earnings per share from continuing operations, and that figure is the control number for the dilution testCorrect
  2. BDiluted EPS must always be presented even if it is higher than basic EPS
  3. CBasic EPS is calculated using the number of shares in issue at the year end
  4. DPrior period EPS is not restated for a bonus issue occurring after the reporting date

Explanation

IAS 33 uses profit from continuing operations attributable to the parent as the control number to decide whether potential shares are dilutive. Antidilutive instruments are ignored, so diluted EPS is not shown higher than basic. Basic EPS uses a weighted average, and bonus issues after the reporting date but before authorisation still require restatement.

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