IFRS – IAS 33: Earnings per share

The International Accounting Standards Committee (IASC) released International Accounting Standard 33 (IAS 33) to address the topic of calculating Earnings per Share.

Also known as EPS, the calculation is particularly important to investors as after concerns of how the company is performing as a whole, they are concerned about their own return on investment.  The calculation is done on Basic EPS or Diluted EPS and must include certain disclosure depending on the business circumstances which occur.  Often times Diluted EPS must be calculated when preferred stock, convertible stock, or other instruments which may be converted to common stock are present.

IAS are principles based standards, rather than strict rules based standards that govern international accounting. IAS standards differ from IFRS standards in that they were introduced prior to 2001, whereas IFRS were produced after this date by the IASB, or the International Accounting Standards Board. When determining the hierarchy of these, the IAS is considered to be the building blocks in which the newer and more relevant IFRS are founded and therefore IFRS is more authoritative when these conflict.

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