AS 20 requirement, the share application money could be converted into the equity shares, hence the same would be considered as potential equity shares.
Diluted EPS should be calculated keeping in view as if the conversion took place as at the first day of the year.
Another point to be considered should be the bonus element on conversion, which should be used for arriving at the number of potential shares.
Moreover, the adjustment should be given for the divident declared during the year, thereby arriving at the profit attributable to the shareholders will be calculated.
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