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The International Accounting Standard ( Ias ) 33

Decent Essays
Investors are particularly interested in a company’s profitability. One way of measuring a company’s performance is to look at their profitability with their reported EPS. Since EPS can be used as a tool (Little, 2015) for comparing profitability, ‘between different entities in the same reporting period and between different reporting periods for the same entity’ (IFRS, 2015). The International Accounting Standard (IAS) 33, ‘Earnings Per Share’ has stipulated how companies should calculate their EPS. The IAS 33 rule applies to all company shares that are publicly traded. According to the IAS 33, ‘Basic EPS is calculated by dividing profit or loss attributable to ordinary equity holders of the parent entity (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the period’ [IASPlus, IAS 33.10]. Thus, basic EPS calculations should contain ‘all items recognised in profit and loss’ (Maynard, 2013, p. 315) and these are crucial information for the investor. Britvic (2013) have disclosed full details of their calculation of their EPS in ‘note 11’ (AR, 2013, p. 84). in their financial statement. They have clearly applied the IAS 33 EPS calculation rule to their EPS. It has been pointed out that EPS is defined ‘within fairly narrow limits’ (Jennings, p.271) to reduce the possibility of subjectivity in the reporting of such a figure. The IAS 33 stated the requirement for the calculation of the Diluted EPS (DEPS). The DEPS ‘is
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