Earnings per share example
The following is an extract from the consolidated statement of profit or loss and
other comprehensive income of the Green Ltd Group for the year ended 31 March
2014:
R
PROFIT FOR THE YEAR 3 020 000
Other comprehensive income for the year 500 000
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 3 520 000
Total comprehensive income attributable to
Owners of the parent 2 700 000
Non-controlling interests 820 000
3 520 000
Additional Information
1. The issued share capital of Green Ltd on 1 April 2013 was as follows:
400 000 ordinary shares amounting to 400 000
300 000 10% cumulative preference shares amounting to 450 000
2. On 31 July 2013 Green Ltd had a rights issue of 1 ordinary share for every 4
ordinary shares held at R8 per share for cash. Management estimated the fair
value to be R10 per share.
3. The following information relates to items that are included in the consolidated
financial statements of the Green Ltd Group:
Green Ltd acquired an 80% interest in Yellow Ltd on 1 April 2013. Goodwill of
R85 000 arose from the acquisition and the goodwill had not been impaired
to date.
During 2014 Yellow Ltd closed down its clothing retail segment due to the
recent influx of cheap imports. The trading profit after tax made by this
segment was R78 000. The company made a loss of R52 000 in
discontinuing this segment.
The increase in the fair value of an investment property belonging to Yellow
Ltd was R34 000 in the current year.
Green Ltd incurred a loss of R76 000 on the disposal of an intangible asset.
The amortisation for the current year of this intangible asset before the sale
took place was R28 000.
A delivery vehicle with a carrying amount of R37 200 belonging to Yellow Ltd
was written off after it was involved in an accident. No funds were recovered
from the insurance company due to the driver driving under the influence of
alcohol.
While the employees of Yellow Ltd performed the year end stock take they
identified inventory with a cost price of R58 000 approaching its expiry date.
After discussions with the sales manager it was decided that the inventory
could no longer be sold at its original selling price. It could however be sold
to a special customer for R50 000.
REQUIRED:
, Calculate the basic earnings per ordinary share and the headline earnings per
ordinary share of the Green Ltd Group for the year ended 31 March 2014 in terms of
International Financial Reporting Standards.
The following is an extract from the consolidated statement of profit or loss and
other comprehensive income of the Green Ltd Group for the year ended 31 March
2014:
R
PROFIT FOR THE YEAR 3 020 000
Other comprehensive income for the year 500 000
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 3 520 000
Total comprehensive income attributable to
Owners of the parent 2 700 000
Non-controlling interests 820 000
3 520 000
Additional Information
1. The issued share capital of Green Ltd on 1 April 2013 was as follows:
400 000 ordinary shares amounting to 400 000
300 000 10% cumulative preference shares amounting to 450 000
2. On 31 July 2013 Green Ltd had a rights issue of 1 ordinary share for every 4
ordinary shares held at R8 per share for cash. Management estimated the fair
value to be R10 per share.
3. The following information relates to items that are included in the consolidated
financial statements of the Green Ltd Group:
Green Ltd acquired an 80% interest in Yellow Ltd on 1 April 2013. Goodwill of
R85 000 arose from the acquisition and the goodwill had not been impaired
to date.
During 2014 Yellow Ltd closed down its clothing retail segment due to the
recent influx of cheap imports. The trading profit after tax made by this
segment was R78 000. The company made a loss of R52 000 in
discontinuing this segment.
The increase in the fair value of an investment property belonging to Yellow
Ltd was R34 000 in the current year.
Green Ltd incurred a loss of R76 000 on the disposal of an intangible asset.
The amortisation for the current year of this intangible asset before the sale
took place was R28 000.
A delivery vehicle with a carrying amount of R37 200 belonging to Yellow Ltd
was written off after it was involved in an accident. No funds were recovered
from the insurance company due to the driver driving under the influence of
alcohol.
While the employees of Yellow Ltd performed the year end stock take they
identified inventory with a cost price of R58 000 approaching its expiry date.
After discussions with the sales manager it was decided that the inventory
could no longer be sold at its original selling price. It could however be sold
to a special customer for R50 000.
REQUIRED:
, Calculate the basic earnings per ordinary share and the headline earnings per
ordinary share of the Green Ltd Group for the year ended 31 March 2014 in terms of
International Financial Reporting Standards.
