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An item of income/expense is required to be in P&L per Ind AS but the entity instead credits/debits securities premium reserve. For EPS computation:
ATreat the item as if it had hit P&L — i.e. include it in profit-from-continuing-operations for EPS purposes, regardless of where it was actually recorded
BIgnore the item entirely for EPS
CInclude only if material
DAdd the item to share capital
Answer & Solution
Correct answer: A. Treat the item as if it had hit P&L — i.e. include it in profit-from-continuing-operations for EPS purposes, regardless of where it was actually recorded
Ind AS 33 contains a 'substance over form' protection: when an item that Ind AS requires in P&L is instead routed via securities premium / other reserves (e.g. by company-law convenience), the EPS computation must reverse that bypass and treat it as if in P&L. Prevents EPS inflation through reserve routing.
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