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AS 20 sum
Accountancy
In this sum...while computing BASIc EPS why convertible debentures issued taken in WANES?....................and the same (10lakh shares)is also divided by 2......why?
Answers (5)
Best Answer
It's because as per AS 20 bonus shares issued to existing shareholders and convertible debentures are issued without consideration. Hence it's assumed to issued at beginning of the earliest period reported. Existing shares 5000250 Bonus to existing shares is 1 share for every 2 share. Therefore 25000125. Further if debentures are converted to shares then 100000 debentures are convertible to 10 shares per debenture. Therefore 1000000 shares. Now if bonus is issued to these shares then you will get 5 lakh shares therefore 5000250 + 25000125 + 500000
