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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