Page 11 - 21. COMPILER QB - INDAS 33

20X1-20X2. Find out the number of shares for the purpose of calculation of basic EPS.

S. No. Date Particulars Number of
shares
1 1-Apr-20X1 Opening balance of outstanding equity shares 1,00,000

2 15-Jun-20X1 Issue of equity shares 75,000
3 8-Nov-20X1 Conversion of convertible preference shares in Equity 50,000
4 22-Feb-20X2 Buyback of shares (20,000)

5 31-Mar-20X2 Closing balance of outstanding equity shares 205,000
SOLUTION

As per para 20 of Ind AS 33, Earnings per share, the weighted average number of ordinary shares outstanding

during the period reflects the possibility that the amount of shareholders’ capital varied during the period as a
result of a larger or smaller number of shares being outstanding at any time. The weighted average number of

ordinary shares outstanding during the period is the number of ordinary shares outstanding at the beginning of
the period, adjusted by the number of ordinary shares bought back or issued during the period multiplied by a

time-weighting factor. The time weighting factor is the number of days that the shares are outstanding as a
proportion of the total number of days in the period; a reasonable approximation of the weighted average is

adequate in many circumstances.

Formula
The weighted average number of shares is calculated as follows:

Number of shares x (number of days the shares were held during the year / 365)

Following the above formula, the weighted average number of shares for calculation of EPS for the year
20X1-20X2 will be as follows:
Sr. Date Particulars No of No of days Weighted

No. shares shares were average no of
outstanding shares

1 1 April 20X1 Opening balance of outstanding equity 1,00,000
shares 365 1,00,000
2 15 June 20X1 Issue of equity shares 75,000 290 59,589
3 8 November Conversion of convertible preference

20X1 shares in Equity 50,000 144 19,726
4 22 February Buy back of shares
20X2 (20,000) (38)* (2,082)

5 31 March 20X2 Closing balance of outstanding equity
shares 2,05,000 1,77,233
*These shares had already been considered in the shares issued. The same has been deducted assuming that

the bought back shares have been extinguished immediately.

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