Question bank — IAS 33 — Earnings per Share
85 questions in FR/EN/ES, scored by the real scoring engine.
Purpose of the standard2 questions
- IAS 33 prescribes the principles for determining and presenting earnings per share so as to improve performance comparisons between entities in the same period and for the same entity from one period to the next.True / falseL1
- To improve the comparison of performance, which element of the earnings per share calculation does IAS 33 emphasise most?Single choiceL1
Entities required to present earnings per share2 questions
- A family company whose ordinary shares are not traded in a public market, and which has not filed a document with a securities regulator, must present earnings per share under IAS 33 because it has issued ordinary shares.True / falseL1Variant
- Orbane SA, the parent of a group, is preparing its stock market flotation. It has just filed its financial statements with the financial markets authority in order to issue ordinary shares in a public market; its shares are not yet traded. Does Orbane fall within the scope of IAS 33 for its separate and consolidated financial statements?Single choiceL2Variant
Separate and consolidated financial statements1 question
Ordinary share, potential ordinary share, dilution2 questions
- A company has issued a bond convertible into ordinary shares, not yet converted. How does IAS 33 characterise this instrument?Single choiceL1
- Cormeil SA, a listed company, has the following instruments in issue. Which of them are potential ordinary shares under IAS 33? More than one answer is possible.Multiple choiceL3
Basic earnings per share formula3 questions
- For the year, Vermeil SA earned a profit attributable to ordinary equity holders of … (in euros). Its weighted average number of ordinary shares outstanding is …; at the reporting date, 2,000,000 ordinary shares are outstanding. Calculate basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL1
- The management accountant of Lorient SA describes the basic earnings per share calculation in a working note. Which sentence of this note is incorrect?Single choiceL2
- At 1 January, Aubrac SA has … ordinary shares outstanding. On 1 April it issues … shares for cash, received on that date: these shares are outstanding for … months of the year (weighting in months, an approximation of the day-based time factor adopted for the case). The profit attributable to ordinary equity holders for the year ended 31 December is … (in euros). Calculate the weighted average number of ordinary shares, then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL3
Profit attributable to ordinary equity holders3 questions
- Basic earnings per share is calculated for the profit attributable to the ordinary equity holders of the parent and, if the entity presents continuing operations separately, also for the profit from those operations attributable to those holders.True / falseL1
- The Fontane group has a profit for the year of … (in euros), of which … belongs to non-controlling interests. The parent also declared, for the year, non-cumulative preference dividends of …, net of any tax effect, on preference shares classified as equity. Calculate the profit attributable to the ordinary equity holders of the parent, the numerator of basic earnings per share.CalculationL2
- For the year, the profit attributable to the ordinary equity holders of the parent of Clairval SA, before preference dividends, is … (in euros). It includes a post-tax profit from discontinued operations of …. The preference shares, cumulative and classified as equity, carry dividends for the year of …, net of any tax effect. Preference dividends are deducted from the profit of continuing operations as well as from total profit (IAS 33, para. 12). Calculate the profit attributable to ordinary equity holders, first for total profit and then for continuing operations.CalculationL3
Preference dividends3 questions
- Malvoisin SA has issued preference shares classified as equity. What adjustment does it make to the profit attributable to the parent to arrive at the numerator of basic earnings per share?Single choiceL1
- For the year, the profit attributable to the parent of Sabaudia SA is … (in euros) before preference dividends. The preference shares, classified as equity, gave rise to declared dividends of …, net of any tax effect; dividends of 180,000 were also declared on the ordinary shares. The weighted average number of ordinary shares is …. Calculate the profit attributable to ordinary equity holders, then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL2
- Delmas SA has two classes of preference shares, both classified as equity, with no tax effect on their dividends. For the year, the dividends declared are … for class A (5% of a nominal amount of 2,000,000) and … for class B (6% of a nominal amount of 1,500,000). The profit attributable to the parent before these dividends is … (in euros) and the weighted average number of ordinary shares is …. Calculate the profit attributable to ordinary equity holders and then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL3
Cumulative and non-cumulative preference shares3 questions
- Ravenel SA has cumulative preference shares, classified as equity, with a nominal amount of 4,000,000 and a 6% rate. The dividend due for the year is …; the board decided not to declare it this year. The profit attributable to the parent before preference dividends is … (in euros) and the weighted average number of ordinary shares is …. Calculate the profit attributable to ordinary equity holders and then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL2
- Thalès SA has cumulative preference shares classified as equity. During the year it paid the dividend of … due for that year, as well as … of dividend arrears relating to the previous year. The profit attributable to the parent before preference dividends is … (in euros) and the weighted average number of ordinary shares is …. Calculate the profit attributable to ordinary equity holders and then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL3
- Meridian SA has non-cumulative preference shares classified as equity. On 12 February, before the financial statements for the year ended 31 December are authorised for issue, the board proposes a preference dividend of 150,000 for that year; the shareholders are due to vote on it on 20 April. The profit attributable to the parent is 1,350,000 and the weighted average number of ordinary shares is 1,500,000. Write a note determining whether this dividend is deducted from the numerator of basic earnings per share for the year, separating case facts, rule and judgement.JudgmentL3
Settlement differences on preference shares1 question
Participating instruments and classes of shares1 question
Weighted average number of shares3 questions
- Ordinary shares issued for cash are generally included in the weighted average number from the date on which the consideration is receivable, which is generally the date of issue.True / falseL1
- At 1 January, Solène SA has … ordinary shares outstanding. On 1 March it issues … shares for cash received on that date: they are outstanding for … months. On 1 November it buys back … of its shares, which leave circulation for the last … months of the year ended 31 December (weighting in months, an approximation of the day-based time factor adopted for the case). Calculate the weighted average number of ordinary shares for the year.CalculationL2
- At 1 January, Tarnos SA has … ordinary shares outstanding. On 1 February it issues … shares on the conversion of a debt: these shares are outstanding … months. On 1 July it issues … shares in place of a reinvested dividend: … months. On 1 December it buys back … shares, withdrawn for … month. The dates used are those of each issue, according to its terms (case convention), with weighting in months. The profit attributable to ordinary equity holders is … (in euros). Calculate the weighted average number of shares and then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL3
Mandatorily convertible instruments2 questions
- The management accountant of Boréal SA describes in a note the treatment of an instrument mandatorily convertible into ordinary shares. Which sentence of this note is incorrect?Single choiceL2
- On 1 October, Brenne SA enters into a contract for a mandatorily convertible instrument: it will be converted on 30 June of the following year into 400,000 ordinary shares. The year ends on 31 December (weighting in months for the case). How many shares under the contract enter the weighted average number for basic earnings per share for the year?Single choiceL3
Partly paid shares1 question
Contingently issuable shares (basic)3 questions
- An acquisition agreement provides that Rivoli SA delivers 100,000 ordinary shares to the seller of a subsidiary when all the performance conditions are met. They are met on 1 September; the shares are physically issued on 1 February of the following year. The year ends on 31 December. From which date do these shares enter basic earnings per share?Single choiceL2
- Hauteville SA has … ordinary shares outstanding throughout the year. An agreement requires it to issue … additional shares for little or no consideration if a revenue target is met; the target and the other conditions are met on 1 October, … months before the reporting date of 31 December (weighting in months). Calculate the weighted contingent shares included in basic earnings, then the weighted average number of ordinary shares.CalculationL3
- Under a takeover contract, Valmy SA must issue two tranches of ordinary shares for little or no consideration, under separate conditions. The first tranche, of … shares, vests on 1 March: all its conditions have been met for … months at 31 December. The second, of … shares, depends on a condition that is not met at the reporting date. Valmy has … ordinary shares outstanding throughout the year and a profit attributable to ordinary equity holders of … (in euros). Calculate the weighted average number of shares for basic earnings and then earnings per share. Round earnings per share to two decimals (case convention).CalculationL3
Bonus issue and share split3 questions
- Castel SA has … ordinary shares outstanding throughout the year until a bonus issue by capitalisation of reserves on 1 September of one new share for four held: no new resources enter the entity. The profit attributable to ordinary equity holders for the year is … (in euros). Calculate the number of shares restated for the bonus issue for the year's calculation, then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL2Variant
- Bréval SA has … ordinary shares at 1 January. On 1 April it issues … shares for cash, outstanding … months until 31 December. On 1 October it makes a bonus issue of one new share for two held, with no new resources. The profit attributable to ordinary equity holders for the year is … (in euros). Calculate the weighted average number of shares for the year, restated for the bonus issue (weighting in months), then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL3Variant
- In a recap note on the bonus issue of shares made by Orléans SA on 1 October, which sentence is incorrect?Single choiceL3
Reverse share split3 questions
- Pasteur SA has … 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 … (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).CalculationL2Variant
- 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 … (in euros) and … 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).CalculationL3Variant
- Which of the following transactions on the share capital of Montaigne SA are among the events for which the weighted average number of shares for the period and the periods presented is adjusted because they change the number of shares without a corresponding change in resources? More than one answer is possible.Multiple choiceL3
Rights issue with a bonus element3 questions
- Sevran SA, which had 1,200,000 shares, makes a rights issue: one new share for two held, at 6.00. The fair value of all the shares before the exercise of the rights is … (in euros), that is a price of … per share before the rights are detached; the proceeds of the issue are … and there are … shares after the issue. Calculate the theoretical ex-rights value of one share, then the retrospective adjustment factor.CalculationL3
- Gaillac SA has … ordinary shares before a rights issue whose rights are exercised on 1 April: … new shares are issued on that date. The adjustment factor for the bonus element, calculated as the price before the rights are detached divided by the theoretical ex-rights value, is …. The number of shares before the exercise is multiplied by this factor and counts … months; all the shares after the exercise count … months (weighting in months, case convention). The profit attributable to ordinary equity holders for the year is … (in euros). Calculate the weighted average number of shares for the year and then basic earnings per share. Round earnings per share to two decimals (case convention).CalculationL4
- During year N, Aurillac SA carried out a rights issue with a bonus element. The price before the rights are detached is … and the theoretical ex-rights value is …. 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 … (in euros) and … 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).CalculationL4
Retrospective adjustment of all periods3 questions
- 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?Single choiceL2
- Dolmen SA has … ordinary shares outstanding throughout year N and a profit attributable to ordinary equity holders of … (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).CalculationL3
- 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 … (in euros) for … shares outstanding throughout the year. For N-1, the published profit was … for … shares; a material error in N-1, corrected retrospectively in the financial statements for N, reduces that profit by …. 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).CalculationL4
Corrections of errors and changes in policies2 questions
- In N+1, Kervan SA retrospectively corrects a material error of year N, which had overstated its profit. The number of shares has not changed. What becomes of the N earnings per share presented as a comparative in the N+1 financial statements?Single choiceL3
- An analyst summarises in a note the effect of error corrections and policy changes on the earnings per share presented by Lanvin SA. Which sentence of the note is incorrect?Single choiceL3
Prior-period diluted earnings per share1 question
Principle of diluted earnings per share2 questions
- Diluted earnings per share is calculated by adjusting the weighted average number of shares for the effects of dilutive potential ordinary shares, the profit attributable to ordinary equity holders remaining that of basic earnings.True / falseL3
- Which statements correctly describe the calculation of diluted earnings per share? More than one answer is possible.Multiple choiceL3
Adjusting the diluted numerator3 questions
- The management accountant of Quercy SA, which has convertible debt, describes the adjustment to the diluted numerator in a note. Which sentence is incorrect?Single choiceL3
- Vernet SA has issued a convertible bond whose interest expense for the year is … (in euros). This expense is deductible at a rate of …% (case datum). The basic profit attributable to ordinary equity holders is …. On conversion, the interest expense would no longer be incurred. Calculate the after-tax adjustment to be made to the numerator of diluted earnings, then the diluted numerator.CalculationL4
- The basic profit of Bernay SA attributable to ordinary equity holders, already net of preference dividends, is … (in euros). The entity has two dilutive convertible instruments: a bond whose interest expense before tax is …, deductible at a rate of …% (case datum), and convertible preference shares whose dividends of …, already deducted in basic earnings, carry no tax effect. Calculate the numerator of diluted earnings if both instruments are included.CalculationL4
Convertible instruments3 questions
- At 1 January, Arles SA already held a convertible bond issued two years earlier, convertible into … ordinary shares. For the year, the profit attributable to ordinary equity holders is … (in euros) and the weighted average number of shares is …. The bond's interest, after tax, is …. The bond is dilutive (case datum). Calculate the diluted numerator, the diluted number of shares and diluted earnings per share. Round earnings per share to two decimals (case convention).CalculationL3
- On 1 July, Pontoise SA issues a bond convertible into … ordinary shares. For the year ended 31 December, the profit attributable to ordinary equity holders is … (in euros) and the weighted average number of shares is …. The bond's interest expense for the year, after tax, is …. The bond is dilutive (case datum) and remains outstanding … months (weighting in months). Calculate the weighted conversion shares and then diluted earnings per share. Round earnings per share to two decimals (case convention).CalculationL4
- In the working note of Ormes SA on diluted earnings, which sentence about a convertible bond issued on 1 July is incorrect?Single choiceL4
Options and warrants: the treasury share method3 questions
- During the year, Olivet SA has … options outstanding, each entitling its holder to one ordinary share at an exercise price of … (in euros). The average market price of the share during the year is …. Using the treasury stock method, calculate the number of incremental shares to add to the denominator of diluted earnings.CalculationL3Variant
- Savoie SA has issued options on its own shares: … options, each entitling its holder to one ordinary share at an exercise price of … (in euros). The average market price for the year is …. The profit attributable to ordinary equity holders is … and the weighted average number of shares is …; the options have no effect on the numerator. Calculate the incremental shares using the treasury stock method, then diluted earnings per share. Round earnings per share to two decimals (case convention).CalculationL4Variant
- Cormier SA has two series of options on its own shares, each option entitling its holder to one ordinary share. Series A: … options at an exercise price of … (in euros). Series B: … options at an exercise price of …. The average market price for the year is …. Each series is considered separately. Calculate the total number of incremental shares to be included for diluted earnings.CalculationL4
Dilution test3 questions
- Which statements about the dilution test for potential ordinary shares are correct? More than one answer is possible.Multiple choiceL3
- For the year, Estrel SA has a profit from continuing operations attributable to ordinary equity holders of … (in euros) and a post-tax loss from discontinued operations of …. The weighted average number of ordinary shares is …. A convertible bond, outstanding all year, would give … shares and remove interest of … after tax. Calculate the incremental earnings per share of the bond, then, after establishing on continuing operations whether it is dilutive, the diluted earnings per share of total profit. Round earnings per share to two decimals (case convention).CalculationL4
- Gironde SA reports, for the year, profit from continuing operations of … (in euros) attributable to ordinary equity holders, plus the post-tax profit of a discontinued operation of …. The entity has … shares on a weighted average basis. A convertible bond exists all year: … shares on conversion and … of interest removed after tax. Determine the incremental earnings per share of the bond, then, once the dilution test has been made, diluted earnings per share of total profit. Round earnings per share to two decimals (case convention).CalculationL4
Order of including instruments3 questions
- Argonne SA is considering two dilutive instruments. A convertible bond would remove … of interest after tax (in euros) and would give … shares. Options, under the treasury stock method, would give … incremental shares with no effect on the numerator. Calculate the incremental earnings per share of each instrument, in order to establish the sequence in which they are taken into account.CalculationL3
- For the year, Rhodes SA has a profit attributable to ordinary equity holders of … (in euros) and a weighted average number of shares of …; all the potential shares below are outstanding all year and dilutive judged against basic earnings alone. In order of issue: a convertible bond (interest removed of … after tax, … shares), convertible preference shares (dividends removed of …, … shares) and options (… incremental shares with no effect on the numerator). Calculate the incremental earnings per share of the convertible preference shares, then diluted earnings per share by ranking the instruments by increasing incremental earnings. Round earnings per share to two decimals (case convention).CalculationL4Variant
- The Cévennes group reports, for the year, a profit attributable to ordinary equity holders of … (in euros) for a weighted average of … shares. Three instruments, outstanding all year, are to be examined: convertible preference shares (dividends of … removed, … shares), options (… incremental shares, with no effect on the numerator) and a convertible bond (interest of … removed after tax, … shares). Calculate the incremental earnings per share of the convertible preference shares, then diluted earnings per share, the instruments being included by increasing incremental earnings. Round earnings per share to two decimals (case convention).CalculationL4Variant
Contingently issuable shares (diluted)3 questions
- For the year, Tourny SA has a weighted average number of shares of …. An agreement entered into before the start of the year (in force … months of the year) provides for two tranches of shares to be issued at the end of a two-year contingency period, for little or no consideration: … shares if cumulative revenue reaches a target; … shares if cumulative operating profit reaches another target. At the end of the first year, cumulative revenue already reaches the target of tranche A; cumulative operating profit does not reach that of tranche B. Calculate the contingent shares to include in diluted earnings, then the number of shares in the diluted denominator (excluding other instruments).CalculationL3
- Bonnet SA has a profit attributable to ordinary equity holders of … (in euros) and a weighted average number of shares of …. An agreement in force all year, with a contingency period that has not ended, provides for the following for little or no consideration: … shares if cumulative profit reaches a target, attained at the level of the reporting date; and … shares if the share price is at least … at the end of the contingency period, the closing price being …. Calculate the number of shares in the diluted denominator (excluding other instruments) and diluted earnings per share. Round earnings per share to two decimals (case convention).CalculationL4
- Latour SA must deliver 300,000 ordinary shares, for little or no consideration, if its cumulative operating profit over three years exceeds 3,000,000. At the end of the first year the cumulative figure is 3,200,000; management expects losses in the next two years that would bring the final cumulative figure below the target. The profit attributable to ordinary equity holders is 4,500,000 for 3,000,000 shares on a weighted average basis. Write a note determining whether these shares enter diluted earnings per share, separating case facts, rule and judgement.JudgmentL4
Contracts settled in shares or cash1 question
Purchased options1 question
Employee share options1 question
Presentation on the face of the income statement2 questions
- The ordinary shares of Orsay SA are traded in a public market. Where and how does the entity present basic and diluted earnings per share?Single choiceL2
- Séquoia SA presents the components of its profit in a separate income statement, followed by a statement of comprehensive income. The year ends with a loss attributable to ordinary equity holders. How does the entity present earnings per share?Single choiceL4
Discontinued operations3 questions
- For the year, Ségur SA has a profit from continuing operations attributable to ordinary equity holders of … (in euros) and a post-tax loss of … relating to a discontinued operation. The weighted average number of ordinary shares is …; 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).CalculationL3
- Delphes SA achieved a profit from continuing operations of … (in euros) attributable to ordinary equity holders and a post-tax profit of … on a discontinued operation; the weighted average number of shares is …. A convertible bond existing all year would remove … of interest after tax against … 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).CalculationL4
- In Anjou SA's note on earnings per share and discontinued operations, which sentence is incorrect?Single choiceL4
Reconciliation of numerators and denominators3 questions
- In the earnings per share note of Coteaux SA, the basic weighted average number of shares is …. The individual effects of the categories of dilutive instruments on the denominator are: options (treasury stock method) …; convertible bonds …; contingent shares …. Calculate the number of shares in the denominator of diluted earnings, as it emerges from the reconciliation of denominators.CalculationL3
- To prepare the reconciliation required in the earnings per share note, Hautes-Terres SA has the following data (in euros): profit attributable to the parent before preference dividends …; preference dividends after tax …; interest on a dilutive convertible bond, removed after tax, …; basic weighted average number of shares …; effect of the options …; effect of the convertible bond …. Calculate the diluted numerator, the diluted denominator and diluted earnings per share. Round earnings per share to two decimals (case convention).CalculationL4Variant
- The accounting department of Vignoble SA prepares the earnings per share reconciliation table (in euros): profit attributable to the parent before preference dividends …, of which … of preference dividends after tax are to be deducted; a dilutive convertible bond whose interest after tax of … would disappear on conversion; a basic weighted average number of shares of …, to which are added … shares for the options and … for the bond. Establish the diluted numerator, the diluted denominator and diluted earnings per share. Round earnings per share to two decimals (case convention).CalculationL4Variant