Purchased options

Learning objectives

• Explain why purchased call and put options are not included in diluted earnings per share (antidilutive effect).L4

Normative references

• IAS 33 §62Purchased call and put options held by the entity on its own ordinary shares are not included in diluted earnings per share, because including them would be antidilutive (the put option would be exercised only if the exercise price were higher than the market price, and the call option only if it were lower).

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

1 question

• Dorian SA has bought call options and put options on its own shares, in the money at the reporting date. How do these purchased options enter the calculation of diluted earnings per share?L4