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University · Ind AS Calculators

EPS under Ind AS 33 — basic & diluted.

Time-weight share movements, restate for bonus issues, strip the bonus element out of rights issues with the theoretical ex-rights factor, then test options and convertibles for dilution — with the full working shown.

Earnings & share movements
Amounts in ₹ lakh · shares in lakh · M1 = first month of the FY
Profit attributable to equity holders (after tax, ₹ lakh)
Preference dividends for the period (₹ lakh)
Cumulative preference: deduct the dividend for the period whether or not declared. Non-cumulative: deduct only if declared for the period.
Shares outstanding at start of year (lakh)
Share movements during the year (effective from start of the month)
For a fresh issue for cash, shares count from when cash is receivable — this tool time-weights in whole months from the start of the movement month.
Bonus & rights adjustments
Bonus issue during the year?
Rights issue during the year (below market price)?
Potential ordinary shares
Employee stock options outstanding?
Options (lakh)
Exercise price ₹
Avg market price ₹
Treasury-stock method: assumed proceeds buy back shares at the average market price; only the shortfall — options × (avg price − exercise price) ÷ avg price — is issued “for free” and dilutes. Assumed outstanding all year.
Convertible debt outstanding?
Result
Earnings for basic EPS (profit − pref. dividend)₹480.00 L
Weighted average ordinary shares118.00 lakh
Basic EPS₹4.07
Diluted earnings / diluted shares₹480.00 L / 122.00 lakh
Diluted EPS₹3.93
Weighted-average working
PeriodShares (lakh)WeightWeighted
Months 1–3100.003/1225.00
Months 4–12124.009/1293.00
Weighted average shares118.00
Dilution ranking & antidilution check
Share options (treasury-stock method)DILUTIVE — INCLUDED
+₹0.00 L earnings, +4.00 lakh shares · incremental EPS ₹0.00 · EPS after step ₹3.93
Ind AS 33 requires each series of potential ordinary shares to be considered in sequence from most dilutive to least dilutive (lowest incremental EPS first). An instrument that would increase EPS — or reduce a loss per share — is antidilutive and ignored.
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How EPS is computed under Ind AS 33

Basic EPS divides profit or loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. The numerator is stated after deducting preference dividends — for cumulative preference shares, the dividend for the period is deducted whether or not declared; for non-cumulative shares, only dividends declared for the period are deducted. The denominator time-weights each share for the portion of the period it was outstanding, counting fresh issues from the date consideration is receivable.

Two capital events need special handling. A bonus issue (or share split) changes the number of shares without any change in resources, so the weighted average is computed as if the bonus had occurred at the beginning of the earliest period presented — comparative EPS is restated by the same factor. A rights issue at below market price contains a bonus element: shares outstanding before the rights date are multiplied by an adjustment factor equal to the fair value per share immediately before exercise divided by the theoretical ex-rights price (TERP), where TERP = (aggregate cum-rights market value + rights proceeds) ÷ total shares after the issue.

Diluted EPS adjusts both numerator and denominator for all dilutive potential ordinary shares. Options and warrants use the treasury-stock method — assumed exercise proceeds are deemed to buy back shares at the average market price, and only the incremental "free" shares dilute (options are dilutive only when the average market price exceeds the exercise price). Convertible instruments use the if-converted method — interest (net of tax) is added back to earnings and conversion shares are added to the denominator. Each series is included in sequence from most dilutive to least dilutive, and any instrument whose inclusion would increase EPS (or decrease a loss per share) is antidilutive and excluded.

Worked example — issue during the year plus in-the-money options

A company earns ₹500 lakh after tax and pays a ₹20 lakh preference dividend. It starts the year with 100 lakh shares and issues 24 lakh shares at the start of month 4. It has 10 lakh employee options with a ₹60 exercise price; the average market price for the year is ₹100.

Inputs
Earnings for basic EPS₹500 L − ₹20 L = ₹480 L
Months 1–3100 lakh × 3/12 = 25.00
Months 4–12124 lakh × 9/12 = 93.00
Options — treasury stock10 × (100 − 60)/100 = 4 lakh incremental
Output
Weighted average shares118.00 lakh
Basic EPS₹480 / 118 = ₹4.07
Diluted shares118 + 4 = 122.00 lakh
Diluted EPS₹480 / 122 = ₹3.93
The mid-year issue is weighted for the nine months it was outstanding. The options are in the money (₹100 > ₹60), so the treasury-stock method adds 4 lakh incremental shares with no change to earnings — incremental EPS of nil, always the most dilutive rank. Diluted EPS of ₹3.93 is below basic EPS of ₹4.07, confirming the options are dilutive.

Common mistakes

Forgetting to restate comparatives for a bonus issue
A bonus issue, share split or consolidation is applied retrospectively to ALL periods presented — including the prior-year comparative and any post-balance-sheet bonus before the financial statements are approved. Showing current-year EPS on adjusted shares against an unadjusted comparative is a classic restatement error.
Treating a rights issue like a normal issue for cash
A rights issue priced below market has an embedded bonus element. Ignoring the theoretical ex-rights adjustment factor understates the pre-rights weighted shares and overstates EPS for the current period — and the comparative must also be multiplied by the factor.
Including out-of-the-money options in diluted EPS
Under the treasury-stock method, options whose exercise price is at or above the average market price for the period produce no incremental shares — they are antidilutive and excluded. Diluted EPS can never be higher than basic EPS.
Skipping the dilution sequencing for multiple instruments
With several potential ordinary shares, each series is ranked by incremental EPS (options first at nil) and included one at a time only while EPS keeps falling. Testing all instruments in aggregate can wrongly include an instrument that is antidilutive in sequence.
Deducting cumulative preference dividends only when declared
For cumulative preference shares the current period's dividend is deducted from earnings whether or not it is declared — but arrears of earlier periods paid in the current period are NOT deducted again.

Frequently asked questions

Who must present EPS under Ind AS 33?+
Companies whose ordinary shares or potential ordinary shares are traded in a public market, and companies in the process of issuing such instruments, must present basic and diluted EPS on the face of the statement of profit and loss. Under Schedule III, Indian companies applying Ind AS present both figures with equal prominence, for continuing and total operations.
How are preference dividends treated in basic EPS?+
Profit attributable to ordinary equity holders is stated after preference dividends: for non-cumulative preference shares, deduct dividends declared for the period; for cumulative preference shares, deduct the dividend for the period whether or not declared. Arrears of earlier periods paid now are not deducted again.
What is the theoretical ex-rights price (TERP)?+
TERP = (number of shares before the rights issue × cum-rights fair value per share + rights shares × rights price) ÷ total shares after the issue. The EPS adjustment factor is the cum-rights fair value per share divided by TERP; shares outstanding before the rights date (and the comparative weighted average) are multiplied by this factor.
What is the treasury-stock method?+
For options and warrants, exercise is assumed at the beginning of the period (or grant date if later). The assumed proceeds are deemed used to buy back shares at the average market price for the period. Only the excess of option shares over the assumed buyback — options × (average price − exercise price) ÷ average price — is added to the diluted denominator, for nil consideration.
How do convertibles affect diluted EPS?+
Under the if-converted method, conversion is assumed from the start of the period (or issue date if later): interest on convertible debt, net of tax, is added back to earnings, and the shares issuable on conversion are added to the denominator. For convertible preference shares, the preference dividend is added back instead.
What does antidilutive mean?+
A potential ordinary share is antidilutive if its assumed conversion would increase EPS or decrease loss per share. Antidilutive instruments are ignored in diluted EPS. Instruments are tested in sequence from most to least dilutive using each one's incremental EPS, with profit from continuing operations as the control number.
What happens to diluted EPS in a loss year?+
When there is a loss attributable to ordinary equity holders, adding potential shares to the denominator would reduce the loss per share — so all potential ordinary shares are antidilutive and diluted EPS equals basic EPS (the same loss per share is reported for both).
Is this calculator a substitute for the Ind AS 33 computation?+
No. It is an educational working that uses whole-month time-weighting and single-event bonus/rights assumptions. Real computations weight by days, handle partly paid shares, contingently issuable shares and multiple overlapping events, and follow the entity's documented policy — have the working reviewed before it goes anywhere near financial statements.

Authoritative sources

Ind AS 33 — Earnings per Share (Companies (Indian Accounting Standards) Rules, 2015) — Notified by MCA and converged with IAS 33. ICAI's educational material on Ind AS 33 illustrates the weighted-average, rights-factor, treasury-stock and if-converted computations.
Always confirm against the latest version of the source. Regulations evolve and amendments are common.
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Last reviewed: 2026-07-29 · For informational purposes only — not professional advice.