Home › CA Final › financialreporting › Ind AS 33 — Diluted EPS: If-Converted Method, Treasury Stock Method, Options/Warrants, Convertibles, Contingently Issuable Shares › Entity issued ₹12,50,000 8% convertible loan sto…
Entity issued ₹12,50,000 8% convertible loan stock on 1 Oct 20X1; 1,500,000 ordinary shares; year ends 30 June. For 20X2 diluted EPS, the loan-stock-equivalent shares included in the denominator are:
A1,687,500 × 9/12 = 1,265,625 (weighted for the period the loan stock was actually outstanding)
B1,500,000
CZero (loan stock not converted)
D1,687,500 for full year
Answer & Solution
Correct answer: A. 1,687,500 × 9/12 = 1,265,625 (weighted for the period the loan stock was actually outstanding)
Potential ordinary shares are weighted for the portion of the period they were outstanding. Loan stock issued 1 Oct 20X1; year ends 30 Jun 20X2 → outstanding 9 of 12 months → 1,687,500 × 9/12 = 1,265,625.
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