ACCA FR · Chapter 10 · Question 9 of 9
In calculating basic EPS, which of the following is deducted from profit for the year (attributable to the parent) to arrive at earnings?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Dividends on irredeemable preference shares that are classified as equity
Explanation
Basic earnings are profit attributable to ordinary equity holders. Preference dividends on shares classified as equity are deducted, because they are not part of profit already. Dividends on redeemable preference shares are already in finance costs. Ordinary dividends are an appropriation to ordinary shareholders and are not deducted. Reserve transfers and OCI items do not affect earnings.
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