10. Amalgamation: Merger (Pooling of Int. Method )

Step 1 : Calculate Earnings for Equity Share Holder :

Earnings of Transferee Co. (New) for complete period. ---------

Earnings of Transferee Co. (Old) for complete period. ---------

Earning ******

Step 2 : Calculate Weighted Average of Eq Shares :

Eq. Share of Transferee Co. --------- Add: Eq. Share allotted in Purchase Consideration to Shareholder of transferor Co. without any fractional Weight (full year time) ---------

Wt Avg of Equity Share ********

10. Amalgamation: Purchase Method.

Step 1 : Calculate Earning as usual of Transferee Co. Only.

Step 2 : Calculate Wt. Avg of share of Transferee Co. along with Purchase Consideration issued, according to time weight.

11. Diluted EPS ( DEPS)

DEPS is BEPS after adjusting effect of diluted potential Equity Share.

Potential Equity Share means any instrument having following features.

i) Resources, from such instrument have been received in cash / Kind. AND

ii) Such Resources have been employed in bussiness. AND

iii) Allotment of Equity Share is pending to any future date.

Example:

• Share Application (amount invested in Bussiness)

• Share Warrant

• Convertible Debenture

• Convertible Preference Share

• Employee Stock Option ( Vested)

• Partly Paid Shares ( not entitled to Dividend)

12. How to Calculate DEPS

Step 1. Identify Potential Eq. Share.

Step 2. Calculate Incremental EPS

Effect of Potential Eq. Share on Earning

Effect of Potential Eq. Share on Wt. Avg

Note: Incremental EPS will be ranked in Ascending order, for

the use in test of dilution.

Step 3. Test of Disolution ( Para 39)

As per para 39,

Potential Equity Share are considered dilutive,

when and only when ,

N P per Share from continuing order ordinary operation

(BEPS-COO) decreases.

For testing purpose, BEPS-COO is applied with potential Equity share in ranking of Step 2.

COO = Continuing Ordinary Operation i.e to remove Extraordinary items after removing TAX

Step 4. Test of Disolution.

BEPS + Effect of Dilutive Potential Equity Shares