Discontinued operations

Learning objectives

• Calculate earnings per share for discontinued operations using the denominator determined for continuing operations.L3, L4

Normative references

• IAS 33 §42Profit or loss from continuing operations attributable to the parent, adjusted in accordance with para. 12 (hence after preference dividends) and excluding items relating to discontinued operations, is the control number used to establish whether potential ordinary shares are dilutive or antidilutive. Appendix A (para. A3) illustrates the consequence: potential ordinary shares that are dilutive against this control number are also included in the other diluted amounts (discontinued operations, total profit or loss), even if they appear antidilutive there.
• IAS 33 §68For a discontinued operation, basic and diluted earnings per share are disclosed either in the statement of profit or loss or in the notes (para. 68); para. 68A provides the same choice when profit or loss is presented in a separate statement.

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

3 questions

• For the year, Ségur SA has a profit from continuing operations attributable to ordinary equity holders of {continuing_earnings} (in euros) and a post-tax loss of {discontinued_loss} relating to a discontinued operation. The weighted average number of ordinary shares is {weighted_shares}; there is no dilutive instrument. Calculate basic earnings per share of the discontinued operation (negative in case of a loss), then basic earnings per share of total profit. Round earnings per share to two decimals (case convention).L3
• Delphes SA achieved a profit from continuing operations of {continuing_earnings} (in euros) attributable to ordinary equity holders and a post-tax profit of {discontinued_profit} on a discontinued operation; the weighted average number of shares is {weighted_shares}. A convertible bond existing all year would remove {after_tax_interest} of interest after tax against {conversion_shares} conversion shares, and the dilution test relates to continuing operations. Establish diluted earnings per share of the discontinued operation, then of total profit. Round earnings per share to two decimals (case convention).L4
• In Anjou SA's note on earnings per share and discontinued operations, which sentence is incorrect?L4