Document ID: chunk:federal_register_of_legislation:F2021C00879:body:0:p25
Version: federal_register_of_legislation:F2021C00879
Segment Type: other
Provision Reference: 
Character Range: 63925–71164

ordinary shares
Reference: AASB 133, paragraphs 19–21

                                                                                                                                                           Shares issued  Treasury(a) shares       Shares outstanding

1 January 20X1                                                                                                       Balance at beginning of year          2,000                              300                      1,700
31 May 20X1                                                                                                          Issue of new shares for cash          800                                –                        2,500
1 December 20X1                                                                                                      Purchase of treasury shares for cash  –                                  250                      2,250
31 December 20X1                                                                                                     Balance at year-end                   2,800                              550                      2,250

Calculation of weighted average:
(1,700 × 5/12) + (2,500 × 6/12) + (2,250 × 1/12) = 2,146 shares or
(1,700 × 12/12) + (800 × 7/12) – (250 × 1/12) = 2,146 shares
(a) Treasury shares are equity instruments reacquired and held by the issuing entity itself or by its subsidiaries.

Example 3  Bonus issue
Reference: AASB 133, paragraphs 26, 27(a) and 28

Profit attributable to ordinary equity holders of the parent entity 20X0                                                                             CU180
Profit attributable to ordinary equity holders of the parent entity 20X1                                                                             CU600
Ordinary shares outstanding until 30 September 20X1                                                                                                  200
Bonus issue 1 October 20X1                                                                                                                           2 ordinary shares for each ordinary share outstanding at 30 September 20X1
                                                                                                                                                     200 × 2 = 400
Basic earnings per share 20X1                                                                                                                        CU600                                                                       = CU1.00
(200 + 400)
Basic earnings per share 20X0                                                                                                                        CU180                                                                       = CU0.30
(200 + 400)

Because the bonus issue was without consideration, it is treated as if it had occurred before the beginning of 20X0, the earliest period presented.

Example 4  Rights issue
Reference: AASB 133, paragraphs 26, 27(b) and A2

                                                                                 20X0                                                                                                                                      20X1             20X2
Profit attributable to ordinary equity holders of the parent entity              CU1,100                                                                                                                                   CU1,500          CU1,800
Shares outstanding before rights issue                                           500 shares
Rights issue                                                                     One new share for each five outstanding shares
                                                                                 (100 new shares total)
                                                                                 Exercise price: CU5.00
                                                                                 Date of rights issue: 1 January 20X1
                                                                                 Last date to exercise rights: 1 March 20X1
Market price of one ordinary share immediately before exercise on 1 March 20X1:  CU11.00
Reporting date                                                                   31 December

Calculation of theoretical ex-rights value per share
                                                                                 Fair value of all outstanding shares before the exercise of rights + total amount received from exercise of rights

                                                                                 Number of shares outstanding before exercise + number of shares issued in the exercise

                                                                                 (CU11.00 × 500 shares) + (CU5.00 × 100 shares)
                                                                                 500 shares + 100 shares

Theoretical ex-rights value per share = CU10.00

Calculation of adjustment factor
Fair value per share before exercise of rights                                                                                                                                                                             CU11.00  = 1.10
Theoretical ex-rights value per share                                                                                                                                                                                      CU10.00

Calculation of basic earnings per share
                                                                                 20X0                                                                                                                                      20X1             20X2
20X0 basic EPS as originally reported:                                                                                                                                                               CU1,100 ÷ 500 shares  CU2.20
20X0 basic EPS restated for rights issue:                                                                                                                                                            CU1,100
                                                                                 (500 shares × 1.1)                                                                                                  CU2.00
20X1 basic EPS including effects of rights issue:                                                                                                                                                    CU1,500
                                                                                 (500 × 1.1 × 2/12) + (600 × 10/12)                                                                                                        CU2.54
20X2 basic EPS:                                                                                                                                                                                      CU1,800 ÷ 600 shares                               CU3.00

Example 5  Effects