CERTYNEX IFRS ACADEMY

An analyst includes, in the computation of diluted earnings per share, share appreciation rights settled solely in cash, treating them as potential shares. What is the error?

Those rights should have been taken into account in the numerator of diluted earnings, by deducting the expense recognised.

Cash-settled programmes are ignored in diluted earnings, because their settlement does not lead to the issue of shares.

Those rights should have been treated as ordinary options, with assumed proceeds equal to the exercise price.

Those rights should have been treated as equity-settled, on the ground that the entity could deliver shares.