Tax rate: The tax rate was 40 per cent for 20X1.
20X1    Profit (loss) from continuing operations attributable to the parent entity [(a)]    Profit (loss) attributable to the parent entity
    CU    CU
First quarter    5,000,000    5,000,000
Second quarter    6,500,000    6,500,000
Third quarter    1,000,000    (1,000,000)
Fourth quarter    (700,000)    (700,000)
Full year    11,800,000    9,800,000
First Quarter 20X1
Basic EPS calculation
     CU    
Profit from continuing operations attributable to the parent entity    5,000,000    
Less: preference shares dividends    (40,000)    (c)
Profit attributable to ordinary equity holders of the parent entity    4,960,000    
Dates    Shares Outstanding    Fraction of period    Weighted- average shares
1 January28 February    5,000,000    2/3    3,333,333
Issue of ordinary shares on 1March    200,000          
1 March31 March    5,200,000    1/3    1,733,333
Weighted-average shares              5,066,666
Basic EPS              CU0.98

(a) This is the control number (before adjusting for preference dividends).

(b) Company A had a CU2,000,000 loss (net of tax) from discontinuing operations in the third quarter.

(c) 800,000 shares × CU0.05
Diluted EPS calculation
Profit attributable to ordinary equity holders of the parent entity              CU4,960,000
Plus: profit impact of assumed conversions              
Preference share dividends    CU40,000    (d)    
Interest on 5% convertible bonds    CU90,000    (e)    
Effect of assumed conversions              CU130,000
Profit attributable to ordinary equity holders of the parent entity including assumed conversions              CU5,090,000
Weighted-average shares              5,066,666
Plus: incremental shares from assumed conversions              
Warrants    0    (f)    
Convertible preference shares    800,000          
5% convertible bonds    480,000          
Dilutive potential ordinary shares              1,280,000
Adjusted weighted-average shares              6,346,666
Diluted EPS              CU0.80

(d) 800,000 shares×CU0.05

(e) (CU12,000,000×5%) ÷ 4; less taxes at 40%

(f) The warrants were not assumed to be exercised because they were antidilutive in the period (CU55 [exercise price] > CU49 [average price]).
Second Quarter 20X1
Basic EPS calculation
     CU    
Profit from continuing operations attributable to the parent entity    6,500,000    
Less: preference shares dividends    (10,000)    [(g)]
Profit attributable to ordinary equity holders of the parent entity    6,490,000    
Dates    Shares outstanding    Fraction of period    Weighted- average shares
1 April    5,200,000          
Conversion of 5% bonds on 1 April    480,000          
1 April - 31 May    5,680,000    2/3    3,786,666
Conversion of preference shares on 1 June    600,000          
1 June - 30 June    6,280,000    1/3    2,093,333
Weighted-average shares         5,880,000
Basic EPS              CU1.10

(g) 200,000 shares×CU0.05
Diluted EPS calculation              
Profit attributable to ordinary equity holders of the parent entity              CU6,490,000
Plus: profit impact of assumed conversions              
Preference share dividends    CU10,000    (h)    
Effect of assumed conversions              CU10,000
Profit attributable to ordinary equity holders of the parent entity including assumed conversions              CU6,500,000
Weighted-average shares              5,880,000
Plus: incremental shares from assumed conversions              
Warrants    50,000    (i)    
Convertible preference shares    600,000    (j)    
Dilutive potential ordinary shares              650,000
Adjusted weighted-average shares              6,530,000
Diluted EPS              CU1.00

[(h)] 200,000 shares × CU0.05

[(i)] CU55×600,000 = CU33,000,000; CU33,000,000 ÷ CU60 = 550,000; 600,000 – 550,000 = 50,000 shares OR [(CU60-CU55) ÷ CU60] × 600,000 shares = 50,000 shares

[(j)] (800,000 shares × 2/3) + (200,000 shares× 1/3)
Third Quarter 20X1
Basic EPS calculation
     CU
Profit from continuing operations attributable to the parent entity    1,000,000
Less: preference shares dividends    (10,000)
Profit from continuing operations attributable to ordinary equity holders of the parent entity    990,000
Loss from discontinuing operations attributable to the parent entity    (2,000,000)
Loss attributable to ordinary equity holders of theparent entity    (1,010,000)
Dates    Shares outstanding    Fraction of period    Weighted- average shares
1 July - 31 August    6,280,000    2/3    4,186,666
Exercise of warrants on 1 September    600,000          
1 September -30 September    6,880,000    1/3    2,293,333
Weighted-average shares              6,480,000
Basic EPS              
Profit from continuing operations         CU0.15
Loss from discontinuing operations         (CU0.31)
Loss    (CU0.16)
Diluted EPS calculation

Profit from continuing operations attributable to ordinary equity holders of the parent entity         CU990,000
Plus: profit impact of assumed conversions          
Preference shares dividends    CU10,000    
Effect of assumed conversions         CU10,000
Profit from continuing operations attributable to ordinary equity holders of the parent entity including assumed conversions         CU1,000,000
Loss from discontinuing operations attributable to the parent entity         (CU2,000,000)
Loss attributable to ordinary equity holders of the parent entity including assumed conversions         (CU1,000,000)
          
Weighted-average shares         6,480,000
Plus: incremental shares from assumed conversions          
Warrants    61,538    
Convertible preference shares    200,000    
Dilutive potential ordinary shares         261,538
Adjusted weighted-average shares         6,741,538
Diluted EPS          
Profit from continuing operations         CU0.15
Loss from discontinuing operations         (CU0.30)
Loss    (CU0.15)

(k) [(CU65-CU55) ÷ CU65] × 600,000 = 92,308 shares; 92,308 × 2/3 = 61,538 shares
Note: The incremental shares from assumed conversions are included in calculating the diluted per-share amounts for the loss from discontinuing operations and loss even though they are antidilutive. This is because the control number (profit from continuing operations attributable to ordinary equity holders of the parent entity, adjusted for preference dividends) was positive (ie profit, rather than loss).
Fourth Quarter 20X1
Basic and diluted EPS calculation
     CU
Loss from continuing operations attributable to the parent entity    (700,000)
Add: preference shares dividends    (10,000)
Loss attributable to ordinary equity holders of the parent entity    (710,000)
Dates    Shares outstanding    Fraction of period    Weighted- average shares
1 October - 31 December    6,880,000    3/3    6,880,000
Weighted-average shares              6,880,000
Basic and diluted EPS              
Loss attributable to ordinary equity holders of the parent entity         (CU0.10)

Note: The incremental shares from assumed conversions are not included in calculating the diluted per-share amounts because the control number (loss from continuing operations attributable to ordinary equity holders of the parent entity adjusted for preference dividends) was negative (ie a loss, rather than profit).
Full Year 20X1
Basic EPS calculation
     CU
Profit from continuing operations attributable to the parent entity    11,800,000
Less: preference shares dividends    (70,000)
Profit from continuing operations attributable to ordinary equity holders of the parent entity    11,730,000
Loss from discontinuing operations attributable to the parent entity    (2,000,000)
Profit attributable to ordinary equity holders of the parent entity    9,730,000
Dates    Shares Outstanding    Fraction of period    Weighted- average shares
1 January - 28 February    5,000,000    2/12    833,333
Issue of ordinary shares on 1 March    200,000          
1 March - 31 March    5,200,000    1/12    433,333
Conversion of 5% bonds on 1 April    480,000          
1 April -31 May    5,680,000    2/12    946,667
Conversion of preference shares on 1 June    600,000          
1 June-31 August    6,280,000    3/12    1,570,000
Exercise of warrants on 1 September    600,000          
1 September-31 December    6,880,000    4/12    2,293,333
Weighted-average shares              6,076,667
Basic EPS              
Profit from continuing operations         CU1.93
Loss from discontinuing operations         (CU0.33)
Profit    CU 1.60
Diluted EPS calculation              
Profit from continuing operations attributable to ordinary equity holders of the parent entity              CU11,730,000
Plus: profit impact of assumed conversions              
Preference share dividends    CU70,000          
Interest on 5% convertible bonds    CU90,000    (l)    
Effect of assumed conversions              CU160,000
Profit from continuing operations attributable to ordinary equity holders of the parent entity including assumed conversions              CU11,890,000
Loss from discontinuing operations attributable to the parent entity              (CU2,000,000)
Profit attributable to ordinary equity holders of the parent entity including assumed conversions              CU9,890,000
Weighted-average shares              6,076,667
Plus: incremental shares from assumed conversions              

Warrants    14,880    (m)    
Convertible preference shares    450,000    (n)    
5% convertible bonds    120,000    (o)    
Dilutive potential ordinary shares              584,880
Adjusted weighted-average shares              6,661,547
Diluted EPS              
Profit from continuing operations              CU1.78
Loss from discontinuing operations              (CU0.30)
Profit         CU1.48
(l) (CU12,000,000×5%) ÷ 4; less taxes at 40%

(m) [(CU57.125* – CU55) ÷ CU57.125]×600,000 = 22,320 shares; 22,320×8/12 = 14,880 shares * The average market price from 1 January 20X1 to 1 September 20X1

(n) (800,000 shares × 5/12) + (200,000 shares × 7/12)

(o) 480,000 shares × 3/12

The following illustrates how Company A might present its earnings per share data on its income statement. Note that the amounts per share for the loss from discontinuing operations are not required to be presented on the face of the income statement.
     For the year ended 20X1
     CU
Earnings per ordinary share
Profit from continuing operations    1.93
Loss from discontinuing operations    (0.33)
Profit    1.60
Diluted earnings per ordinary share
Profit from continuing operations    1.78
Loss from discontinuing operations    (0.30)
Profit    1.48
The following table includes the quarterly and annual earnings per share data for Company A. The purpose of this table is to illustrate that the sum of the four quarters' earnings per share data will not necessarily equal the annual earnings per share data. The Standard does not require disclosure of this information.