Retrospective adjustment of all periods

Learning objectives

• Determine the periods to be restated and the disclosures to be made when the number of shares changes after the reporting period but before the financial statements are authorised for issue.L2, L3, L4

Normative references

• IAS 33 §64If the number of ordinary or potential ordinary shares increases as a result of a capitalisation, bonus issue or share split, or decreases as a result of a reverse share split, basic and diluted earnings per share for all periods presented are adjusted retrospectively; if the change occurs after the reporting period but before the financial statements are authorised for issue, the calculations for that period and for any prior periods presented are based on the new number of shares, and that fact is disclosed. Basic and diluted earnings per share for all periods presented are also adjusted for the effects of errors and changes in accounting policies accounted for retrospectively.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

6 questions

• Pasteur SA has {shares_before_event} ordinary shares outstanding throughout the year, until a reverse share split on 1 November: one new share for five old shares. The profit attributable to ordinary equity holders for the year is {earnings_ordinary} (in euros). Calculate the number of shares for the year's calculation, restated for the consolidation, then basic earnings per share. Round earnings per share to two decimals (case convention).L2
• In its financial statements for year N, Lumière SA presents year N-1 as a comparative, for which it had published basic earnings per share of 0.15: profit attributable to ordinary equity holders of {prior_earnings} (in euros) and {prior_shares} shares outstanding throughout the year. During year N the entity carried out a reverse share split of one new share for four old ones. For the N-1 comparative, calculate the restated number of shares and then the restated basic earnings per share. Round earnings per share to two decimals (case convention).L3
• During year N, Aurillac SA carried out a rights issue with a bonus element. The price before the rights are detached is {price_before_rights} and the theoretical ex-rights value is {theoretical_price}. For year N-1, presented as a comparative, the entity had published basic earnings per share of 1.88, with a profit attributable to ordinary equity holders of {prior_earnings} (in euros) and {prior_shares} shares. Calculate the adjustment factor, the restated number of N-1 shares and the restated comparative basic earnings per share. Round earnings per share to two decimals (case convention).L4
• On 10 February, after the reporting date of 31 December but before the financial statements are authorised for issue (15 March), Bastide SA makes a bonus issue of one share for five. The financial statements present the year just ended and the previous year. How is earnings per share treated?L2
• Dolmen SA has {shares_at_closing} ordinary shares outstanding throughout year N and a profit attributable to ordinary equity holders of {earnings_ordinary} (in euros). On 20 February N+1, after the reporting date but before the financial statements for N are authorised for issue, it splits its shares at the rate of three new shares for one old share. Calculate the number of shares and the basic earnings per share for N presented in those financial statements. Round earnings per share to two decimals (case convention).L3
• The financial statements for year N of Rochefort SA present N-1 as a comparative. For N, the profit attributable to ordinary equity holders is {earnings_year} (in euros) for {shares_year} shares outstanding throughout the year. For N-1, the published profit was {prior_earnings_published} for {prior_shares} shares; a material error in N-1, corrected retrospectively in the financial statements for N, reduces that profit by {error_adjustment}. After the end of N but before authorisation for issue, the entity consolidates its shares at the rate of one new share for ten old ones. Calculate basic earnings per share for N and for N-1 as presented. Round earnings per share to two decimals (case convention).L4