An existing company ( 10 yrs)has collected share application money in the current year. (Other info: till now, the no. of shares to be allotted is not decided/ pending)
1)Should the Share Application money be construed as potential equity shares?
And consequently,should Diluted EPS be shown after giving effect to the adjustment
2) Does weighted average needs to be applied for calculating Diluted EPS?
08 August 2008
No of shares to be alloted is irrelavant and it is the Share Application Money which is to be construed for the purpose of Potential Equity Shares to calculate diluted EPS. Also, due weightage shall be applied to calculate the Diluted EPS.
I Thank You for the above reply , but plz clear this doubt.
The company (listed - 10 yrs) has received Share Application Money, which is pending allotment as on 31 .3 .2008 . It is not yet clear as to how many no. of shares it issues against this share application money .
In this case, how should one calculate the Diluted EPS when the exact number of potential equity shares is not known.
CAclubindia
