## Weighted Average Number of Equity Shares (WANES)

Each tranche of shares is time-weighted — multiplied by the fraction of the reporting period it was actually outstanding.

$$\text{WANES} = \sum \left(\text{No. of Shares} \times \frac{\text{Months Outstanding}}{\text{Total Months in Period}}\right)$$

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### When Do Shares Enter the Count?

Event	Counted From
Opening balance	Start of period (full weight)
New issue for cash	Date of issue
Buyback / cancellation	Deducted from date of buyback
Bonus / split / consolidation	Start of earliest period (see Bonus topic)

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### Two Equivalent Calculation Methods

Method 1 – Incremental (add each change separately)

Weight each tranche from the date of the event and sum all:

Tranche	Shares	Weight	Weighted
Opening balance	+	12/12
New issue	+	months remaining / 12
Buyback	−	months remaining / 12
WANES			Sum

Method 2 – Period balance (running total)

Compute the actual share count in each sub-period and weight by sub-period length:

Sub-period	Shares	Months	Weighted
Jan – event 1	X	n₁	X × n₁/12
Event 1 – event 2	X+issue	n₂	...
Event 2 – Dec	X+issue−buyback	n₃	...
WANES			Sum

Both methods always produce the same answer.

Worked example

### Example 1

WANES with a New Issue and a Buyback (December year-end)

Incremental Method:

Tranche	Shares	Months Remaining	Weight	Weighted
Opening	1,800	12	12/12	1,800
New issue (31 May → Dec = 7 months)	+600	7	7/12	+350
Buyback (1 Nov → Dec = 2 months)	−300	2	2/12	−50
WANES				2,100

Period Balance Method (verification):

Sub-period	Shares	Months	Weighted
Jan–May (5 months)	1,800	5	750
Jun–Oct (5 months)	2,400	5	1,000
Nov–Dec (2 months)	2,100	2	350
WANES			2,100 ✓

### Example 2

WANES with Partly Paid Shares (December year-end)

Date	Shares	Face Value	Paid-Up
01-Jan	1,800	₹10	₹10 (fully paid)
01-Jan	1,000	₹10	₹5 (partly paid)

Partly paid shares are converted to fully-paid equivalents first:

Equivalent = 1,000 × (5/10) = 500 shares

WANES = 1,800 + 500 = 2,300 shares

Rule: Partly paid shares participate in earnings only to the extent of the fraction paid up.

⚠️ Common exam mistakes

Using a simple average of opening and closing shares instead of a proper time-weighted average.
Counting months from the wrong end — a share issued on 1 November in a December year-end is outstanding for 2 months, not 11.
Forgetting to subtract the buyback — it reduces the weighted count from the date of buyback, not from year-start.
Treating bonus shares like a cash issue and time-weighting them by date — bonus shares always receive full-year weight (they are assumed outstanding from the start of the earliest period).
Including partly paid shares at their full face count without converting to fully-paid equivalents.

Reference: Para 15–20 (WANES computation) — AS 20 – Earnings Per Share (ICAI)

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