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2 Basic EPS
Basic EPS is calculated by dividing the net profit or loss for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

1. 
   Measurement
   

Basic EPS should be calculated by dividing the net profit or loss for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
(IAS 33: para. 10)
. _CDC, Net profit/(loss) attributable to ordinary shareholders
Basic tro =
Weighted average number of ordinary shares outstanding during the period

2. 
   Earnings
   

Earnings includes all items of income and expense (including tax and non-controlling interests) less net profit attributable to preference shareholders, including preference dividends. (IAS 33: para. 12)
Preference dividends deducted from net profit consist of:

1. 
   Preference dividends on non-cumulative preference shares declared in respect of the period
   
2. 
   The full amount of the required preference dividends for cumulative preference shares for the
   

period, whether or not they have been declared (excluding those paid/declared during the period in respect of previous periods) (IAS 33: para. 14)
Note. In an exam question any preference shares will be redeemable and the dividend will already have been accounted for under finance costs.

3. 
   Per share
   

The number of ordinary shares used should be the weighted average number of ordinary shares during the period. This figure (for all periods presented) should be adjusted for events, other than the conversion of potential ordinary shares, that have changed the number of shares outstanding without a corresponding change in resources. (IAS 33: para. 19)
The time-weighting factor is the number of days the shares were outstanding compared with the total number of days in the period; a reasonable approximation is usually adequate. (IAS 33: para. 20)

4.