4.5 Earnings per Share

Although IFRS Accounting Standards and U.S. GAAP use similar methods to calculate both basic and diluted earnings per share (EPS), there are detailed application differences, which are summarized in the table below.

Topic	IFRS Accounting Standards (IAS 33)	U.S. GAAP (ASC 260-10)
Treatment of mandatorily redeemable common shares and forward contracts that require physical settlement of a fixed number of shares for cash	Forward contracts that require physical settlement of a fixed number of shares for cash: Basic EPS — An entity treats the shares as outstanding (and includes any earnings impact in the numerator). Diluted EPS — An entity applies the reverse treasury stock method to the extent that the instrument is dilutive. Mandatorily redeemable common shares (basic and diluted EPS): These shares are typically excluded from the denominator.	Basic EPS — An entity excludes the common shares (and any related earnings effect) that are to be redeemed or repurchased in calculating EPS. An entity applies the two-class method of calculating EPS. Diluted EPS — No further adjustment to the numerator or the denominator is necessary.
Treatment of mandatorily convertible instruments	Ordinary shares that will be issued upon conversion are considered outstanding in the calculation of basic EPS from the date the contract is entered into, irrespective of whether the contract is participating. The result is similar to that achieved by applying the two-class method, but the presentation differs. However, the EPS result differs from that calculated under U.S. GAAP when the instrument is not a participating security. For diluted EPS, the shares are considered outstanding and no adjustment is made to the numerator.	If the instrument is a participating security, entities should apply the two-class method (the results of doing so are similar to those achieved when an entity considers the shares outstanding) to calculate basic EPS and the more dilutive of the two-class method or if-converted method to calculate diluted EPS. If the instrument is not a participating security, entities do not adjust the numerator or denominator in computing basic EPS. The if-converted method is applied to calculate diluted EPS.
Application of the two-class method to participating securities	The two-class method applies only to participating securities that are equity instruments. It is not required for participating debt instruments (e.g., participating convertible debt).	The two-class method applies to participating securities irrespective of whether they are debt or equity instruments.
Diluted EPS denominator difference: treasury stock method — year-to-date (YTD) computation	The number of incremental shares is determined independently for each period presented. The number of dilutive potential ordinary shares in the YTD period is not a weighted average of the dilutive potential ordinary shares included in each interim computation.	For YTD diluted EPS, the number of incremental shares included in the denominator is determined by using a weighted average of the number of incremental shares included in each quarterly diluted EPS computation.
Diluted EPS denominator difference: contingently issuable shares — YTD computation	Weighting interim periods in the YTD computation is not permitted. See “treasury stock method — YTD computation” above.	For YTD computations, the number of contingent shares included in the diluted EPS denominator is determined by weighting the interim periods.
Diluted EPS denominator difference: contingently convertible instruments	Contingently issuable shares from a contingently convertible instrument with a market price trigger are included in the calculation of diluted EPS (if dilutive) only if the market price trigger was met at the end of the reporting period.	Contingently issuable shares from a convertible instrument with a market price trigger are included in the calculation of diluted EPS (if dilutive) regardless of whether the market price trigger has been met.