Document ID: chunk:federal_register_of_legislation:F2021C00879:body:0:p27
Version: federal_register_of_legislation:F2021C00879
Segment Type: other
Provision Reference: 
Character Range: 77152–87262

liability component (see AASB 132 Financial Instruments: Presentation).

Adjusted profit attributable to ordinary equity holders
of the parent entity                                                                                                                                                            CU1,004 + CU10 – CU4
= CU1,010
Number of ordinary shares resulting from conversion of bonds                                                                                                                                             30
Number of ordinary shares used to calculate diluted earnings per share                                                                                                          1,000 + 30 = 1,030
Diluted earnings per share                                                                                                                                                      CU1,010                  = CU0.98
1,030

Example 7  Contingently issuable shares
Reference: AASB 133, paragraphs 19, 24, 36, 37, 41–43 and 52

Ordinary shares outstanding during 20X1                                                                                                        1,000,000 (there were no options, warrants or convertible instruments outstanding during the period)
An agreement related to a recent business combination provides for the issue of additional ordinary shares based on the following conditions:
                                                                                                                                               5,000 additional ordinary shares for each new retail site opened during 20X1
                                                                                                                                               1,000 additional ordinary shares for each CU1,000 of consolidated profit in excess of CU2,000,000 for the year ended 31 December 20X1
Retail sites opened during the year:                                                                                                           one on 1 May 20X1
                                                                                                                                               one on 1 September 20X1
Consolidated year-to-date profit attributable to ordinary equity holders of the parent entity:                                                 CU1,100,000 as of 31 March 20X1
                                                                                                                                               CU2,300,000 as of 30 June 20X1
                                                                                                                                               CU1,900,000 as of 30 September 20X1 (including a CU450,000 loss from a discontinued operation)
                                                                                                                                               CU2,900,000 as of 31 December 20X1

Basic earnings per share

                                                                                                                                                                                                                                                                                                                                                First quarter     Second quarter     Third quarter     Fourth quarter     Full year

Numerator (CU)                                                                                                                                                                                                                                                                                                                                  1,100,000         1,200,000          (400,000)         1,000,000          2,900,000
Denominator:
Ordinary shares outstanding                                                                                                                                                                                                                                                                                                                     1,000,000         1,000,000          1,000,000         1,000,000          1,000,000
Retail site contingency                                                                                                                                                                                                                                                                                                                         –                 3,333(a)           6,667(b)          10,000             5,000(c)
Earnings contingency(d)                                                                                                                                                                                                                                                                                                                         –                 –                  –                 –                  –
Total shares                                                                                                                                                                                                                                                                                                                                    1,000,000         1,003,333          1,006,667         1,010,000          1,005,000
Basic earnings per share (CU)                                                                                                                                                                                                                                                                                                                   1.10              1.20               (0.40)            0.99               2.89

(a) 5,000 shares × 2/3
(b) 5,000 shares + (5,000 shares × 1/3)
(c) (5,000 shares × 8/12) + (5,000 shares × 4/12)
    (d) The earnings contingency has no effect on basic earnings per share because it is not certain that the condition is satisfied until the end of the contingency period. The effect is negligible for the fourth-quarter and full-year calculations because it is not certain that the condition is met until the last day of the period.

Diluted earnings per share

                                                                                                                                                                                                                                                                                                                                                                                                           First quarter     Second quarter     Third quarter     Fourth quarter     Full year

Numerator (CU)                                                                                                                                                                                                                                                                                                                                                                                             1,100,000         1,200,000          (400,000)         1,000,000          2,900,000
Denominator:
Ordinary shares outstanding                                                                                                                                                                                                                                                                                                                                                                                1,000,000         1,000,000          1,000,000         1,000,000          1,000,000
Retail site contingency                                                                                                                                                                                                                                                                                                                                                                                    –                 5,000              10,000            10,000             10,000
Earnings contingency                                                                                                                                                                                                                                                                                                                                                                                       –(a)              300,000(b)         –(c)              900,000(d)         900,000(d)
Total shares                                                                                                                                                                                                                                                                                                                                                                                               1,000,000         1,305,000          1,010,000         1,910,000          1,910,000
Diluted earnings per share (CU)                                                                                                                                                                                                                                                                                                                                                                            1.10              0.92               (0.40)(e)         0.52               1.52

   (a)         Company A does not have year-to-date profit exceeding CU2,000,000 at 31 March 20X1. The Standard does not permit projecting future earnings levels and including the related contingent shares.
   (b) [(CU2,300,000 – CU2,000,000) ÷ 1,000] × 1,000 shares =