CERTYNEX IFRS ACADEMY

Sorbier SA has issued preference shares that IAS 32 classifies as a financial liability; their dividends for the year, 120,000, are recognised as an expense. How do these dividends enter the numerator of basic earnings per share?

They are deducted a second time from the profit attributable to the parent, as preference dividends, in addition to their recognition as an expense.

They are already included in profit for the period, so the numerator is not adjusted a second time on that account.

They are added back to the profit attributable to the parent, because they do not reward ordinary shareholders.

They are ignored, the numerator being the profit before the finance costs for the year.