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Microlesson · 5-min read

Shares with Different Nominal Values

## Shares with Different Nominal Values

When a company has equity shares of different face values (e.g., some at ₹10 and others at ₹5), they cannot be mixed in WANES directly — each rupee of face value represents a different economic interest.

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### Rule under AS 20

Convert all share classes to equivalent shares of a common nominal value before combining.

$$\text{Equivalent Shares} = \text{No. of Shares} \times \frac{\text{This Class's Face Value}}{\text{Common Base Face Value}}$$

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### How to Calculate EPS

1. Choose one face value as the common base (typically the dominant class).

2. Convert each class to equivalent shares of that base value.

3. Time-weight each class from its date of issue.

4. Combine to get total WANES.

5. Basic EPS = EAFESH / combined WANES — this EPS is per share of the base face value.

6. EPS per share of another class = Base EPS × (Other Class FV / Base FV).

Worked example

### Example 1

Example: Two Classes of Equity Shares

EAFESH = ₹10,00,000

DateSharesFace ValuePaid-Up
01-Jan18,000₹10₹10
01-Apr4,000₹5₹5

Year-end: 31 December. Common base = ₹10.

WANES (₹10 base):

ClassSharesMonthsFV RatioWeighted Equiv
₹10 class18,00012/1210/10 = 118,000
₹5 class4,0009/125/10 = 0.51,500
Total WANES19,500

EPS per ₹10 share = ₹10,00,000 / 19,500 = ₹51.28

EPS per ₹5 share = ₹51.28 × (5/10) = ₹25.64

Logic: A ₹5 share carries half the economic interest of a ₹10 share, so it earns half the EPS.

⚠️ Common exam mistakes

  • Adding shares of ₹10 face value and ₹5 face value directly without converting to a common base — this overstates WANES and understates EPS.
  • Forgetting to time-weight the second class of shares from its issue date — the ₹5 shares issued on 01 April get only 9/12 weight, not 12/12.
  • Computing only one EPS figure when two classes of shares have different face values — a separate EPS should be presented for each class.
Reference: Para 20 (shares with different nominal values) — AS 20 – Earnings Per Share (ICAI)
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