PDF · As 20
AS 20 Earnings Per Share: Basic EPS and Weighted Average Shares for CA Inter
- Shared by
- Kavyansh
- Course
- CA Inter
- Subject
- Advanced Accounting
- Added
- 1 Nov 2026
Part of: CA InterAdv Accounting
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These notes cover AS 20 Earnings Per Share for CA Inter Advanced Accounting. The pages work through how basic EPS is presented on the face of the statement of profit and loss, how net profit attributable to equity shareholders (NPAESH) is arrived at after tax and preference dividend, and why the weighted average number of equity shares (WANES) is needed. Worked examples use shares issued, bought back and held at different nominal values. The material suits students preparing for CA Inter Advanced Accounting who want a clear step-by-step base before practising questions.
What the notes cover
The note starts with the presentation rule that basic and diluted EPS appear on the face of the profit and loss statement with equal prominence. It then explains the basic EPS formula, the treatment of more than one class of equity shares based on dividend rights, and equity shares with different nominal values converted to an equivalent number of shares. Each concept is followed by a numerical example so the steps are easy to trace.
How to use them for revision
Read the NPAESH formula first, then work through the WANES examples on shares issued, bought back and held for part of the year. The alternative time-based method shown in the notes is useful for checking your answer. Practise the examples without looking at the solution, then compare. The distinction between cumulative and non-cumulative preference shares is a common point for questions, so revise that separately.
Who should read this
These notes are most useful for CA Inter students studying Advanced Accounting who are working on the AS 20 chapter, or who find the weighted average calculation confusing. They are also helpful for revising EPS treatment before an exam, since the examples cover the main variations of issue, buyback and amalgamation.
Key topics in these notes
- Basic EPS calculation
- Net profit attributable to equity shareholders (NPAESH)
- Weighted average number of equity shares (WANES)
- Equity shares with different nominal values
- More than one class of equity shares
- Cumulative and non-cumulative preference shares
- Effect of amalgamation on EPS
Related notes
Frequently asked questions
What is the formula for basic EPS under AS 20?
Basic EPS is net profit attributable to equity shareholders divided by the weighted average number of equity shares outstanding during the period.
How is NPAESH calculated?
The notes take profit after tax and deduct preference dividend, with cumulative and non-cumulative preference shares treated differently.
Why is weighted average number of shares used instead of the closing number?
The profit figure covers a period, while the closing share count is a single date, so WANES is used to make the two comparable.
Are the examples in these notes worked with shares issued and bought back?
Yes, the notes include examples with shares issued during the year, shares bought back, and equity shares of different face values.
How can I get the full notes?
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