1. The Concept 2. Example Source: ICAP Study TexeMeus Kampus ce Shave split (usually to achieve greater marketability of shares) is the division of the existing Iscued share capital of the company into a larger number of emaller denominations shares, = 78 tonovate The overall capital remainz the 2a) For example, a shareholder had 100 ordinary shares of Re. 50 par value per share, that Is total Re. 5,000. The company made a 5 for 1 share split. Now the shareholder would have 500 shares Of Re. 10 par value per share, that iz came total of Rz. 5,000. ‘Treatment: Since there ic no change in actual resources, the calculation perepective Is came as that of bonus issue and a ‘share eplit fraction’ ic applied to ordinary chares already In izeue Shire fifi = Number of shares in holding after share split Number of shares in holaing before share split Comparatis The comparative EPS is alco restated: 2 Comparative number of shares x share split fraction 1 Comparative EPS x reverse share split fractionABC Kampus ‘Queztion: Pacif Limited (PL) has a 31 December fi vancial year end, 1 January 20x4 it has 4,000,000 shares in issue On 1 July 20x5 it made a5 for 2 share split. There were no share issues oF Basle EPS reported In 20x4 was: Rs. 20,000,000/4,000,000 shares = Rs. S per share Earning attributabl fe to ordinary shareholders the year 20 are Rs. 24,000,000 Required: slate basic EPS for other changes in Year 20%4 Jaa ee 28 Mnnoyatve™ the year ended 31-December 20xS (including comparative for 20x4) Basic ers = = 24 pershare Goxs) j asle EPS = Rs.2 pershare ware split fraetion =—>— Goet Reseated) Per ihe split fret Z Basle EPS = rs. 5 por share «2/5 = Re.2pershare [pate Number of Time pracgion Welahted averag (Cox Resease) shares factor number 2 January to 30 June oqo = x2 «5/2 5.000000 1 July 31 December xen 5,000,000