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An entity repurchases EQUITY-classified preference shares at a DISCOUNT to carrying amount: carrying ₹50,000, FV of consideration paid ₹49,000. For EPS:
AADD ₹1,000 to numerator — the discount is a benefit accruing to ordinary equity holders
BDeduct ₹1,000 from numerator
CNo adjustment
DCharge ₹1,000 to OCI
Answer & Solution
Correct answer: A. ADD ₹1,000 to numerator — the discount is a benefit accruing to ordinary equity holders
When the carrying amount of preference shares EXCEEDS the FV of consideration paid to retire them, the excess (₹1,000) is a gain accruing to ordinary equity holders. It is ADDED to numerator for EPS purposes — opposite direction from a premium repurchase.
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