Home › CA Final › financialreporting › Ind AS 33 — Earnings Per Share: Basic EPS, Preference Share Adjustments, Increasing-Rate Preference Shares, Redemption/Early Conversion › Dividends on preference shares classified as FIN…
Dividends on preference shares classified as FINANCIAL LIABILITIES under Ind AS 32 are, for EPS purposes:
ACapitalised as part of equity
BAlready accounted for as finance cost in arriving at profit or loss; no further adjustment needed
CDeducted from profit attributable to ordinary equity holders as a separate EPS adjustment
DAdded to numerator
Answer & Solution
Correct answer: B. Already accounted for as finance cost in arriving at profit or loss; no further adjustment needed
Liability-classified preference dividends sit above the line as finance costs — they are already in P&L. Only EQUITY-classified preference dividends require a separate EPS adjustment to numerator.
Related questions
Identify the correct statement about EPS computation under Ind AS 33.An entity issued preference shares at a premium of ₹1,00,000 to compensate buyers for an AInd AS 33 lists examples of POTENTIAL ORDINARY SHARES. Which is NOT one?An entity's preference shares are classified as a financial LIABILITY. The interim period An item of income/expense is required to be in P&L per Ind AS but the entity instead crediAn entity has NON-cumulative preference shares (equity-classified) for which it CHOSE NOT ABC Ltd. issues 9% preference shares of ₹10 each, total issue value ₹10 lakh; 5-year tenorAdjustments to EPS numerator for year 20X4: PAT ₹1,50,000; amortisation of discount on inc