Page 28 - PowerPoint Presentation

EARNINGS PER SHARE

Diluted earnings per share

• Diluted earnings per share assist the users of financial

statements to evaluate the sensitivity of basic earnings per
share with regard to future changes in the capital

structure of the enterprise. These future changes in the

capital structure may either have a dilutive (decreasing

earnings per share) or anti-dilutive (increasing earnings
per share) effect on future earnings per share.

• For the purpose of calculating diluted earnings per share,

the net profit attributable to ordinary shareholders and

the weighted average number of shares outstanding
should be adjusted for the effects of all dilutive potential

ordinary shares.

• A potential ordinary share is defined in IAS 33 as a

financial instrument or other contract that may entitle its

holder to ordinary shares.

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