CERTYNEX IFRS ACADEMY

Évaria SA buys back preference shares classified as equity for an amount that differs from their carrying amount. How does this settlement difference enter basic earnings per share?

It does not enter: settling preference shares is a transaction with shareholders, foreign to the earnings per share calculation, with no effect on the numerator or the denominator.

It adjusts the numerator: it is one of the after-tax amounts by which the profit attributable to ordinary equity holders is adjusted.

It adjusts the denominator, by increasing or decreasing the number of ordinary shares outstanding.

It enters diluted earnings, with the adjustments for convertible instruments, but not basic earnings.