IAS 33 vs ASC 260: earnings per share

Earnings per share is the number most quoted from an income statement, and IAS 33 and ASC 260 were largely converged in the 1990s. That makes the remaining differences easy to miss, especially in quarterly reports. This guide compares the two side by side, works through a half-year diluted EPS calculation where the share price moves, and covers convertibles, contracts settled in cash or shares, participating securities, presentation and what IFRS 18 changes.

By Awais Jameel, Chartered Accountant. Reviewed by Muhammad Bilal, Chartered Accountant. Updated . 7 minute read.

Short answer

IAS 33 vs ASC 260 is a comparison of near-twins: both standards calculate basic earnings per share as profit attributable to ordinary shareholders divided by the weighted average number of shares outstanding, and diluted EPS by adding the shares that options, warrants, convertibles and contingent arrangements would issue, using the treasury stock method for options and the if-converted method for convertible instruments, which US GAAP has required for all convertibles since ASU 2020-06. Both exclude potential shares that would increase EPS, and both use the two-class method for participating securities. The differences are in the details. In interim reports, US GAAP computes year-to-date diluted shares as the average of the quarterly computations, while IAS 33 computes each period independently. US GAAP lets a share-based payment award rebut the presumption of share settlement when past practice points to cash. From 2027, IFRS 18 limits additional per-share amounts in IFRS statements to the notes, using totals, subtotals or management-defined performance measures. In this guide's example, the same company reports half-year diluted EPS of CU 1.08 under US GAAP and CU 1.06 under IFRS.

At a glance

Method
Near-identical
Basic EPS
Same formula
Options
Treasury stock, both
Convertibles
If-converted, both
Year-to-date EPS
Computed differently
Cash flow per share
Banned in both
IAS 33 vs ASC 260: earnings per shareMethod: Near-identical; Basic EPS: Same formula; Options: Treasury stock, both; Convertibles: If-converted, both; Year-to-date EPS: Computed differently; Cash flow per share: Banned in both.KEY FACTS AT A GLANCEIAS 33 vs ASC 260: earnings per shareMethodNear-identicalBasic EPSSame formulaOptionsTreasury stock, bothConvertiblesIf-converted, bothYear-to-date EPSComputed differentlyCash flow per shareBanned in bothTax BakersIAS 33 vs ASC 260: earnings per shareMethod: Near-identical; Basic EPS: Same formula; Options: Treasury stock, both; Convertibles: If-converted, both; Year-to-date EPS: Computed differently; Cash flow per share: Banned in both.KEY FACTS AT A GLANCEIAS 33 vs ASC 260: earnings pershareMethodNear-identicalBasic EPSSame formulaOptionsTreasury stock, bothConvertiblesIf-converted, bothYear-to-date EPSComputed differentlyCash flow per shareBanned in bothTax Bakers
Key facts at a glance, as set out in this guide.

What do IAS 33 and ASC 260 have in common?

  • Basic EPS: profit attributable to ordinary or common shareholders, after preference dividends, divided by the weighted average number of shares outstanding.
  • Diluted EPS: adjusts for all dilutive potential shares, with options and warrants under the treasury stock method, assuming proceeds buy back shares at the average market price, and convertibles under the if-converted method, adding back interest after tax.
  • Antidilution: potential shares that would raise EPS, or reduce a loss per share, are left out, tested in sequence from the most dilutive.
  • Contingently issuable shares count when the conditions would be met if the end of the period were the end of the contingency period.
  • Share splits and bonus issues, including those after the reporting date but before the statements are issued, are applied retrospectively to all periods.

See IAS 33 earnings per share and ASC 260 earnings per share.

IAS 33 vs ASC 260: what are the differences?

IAS 33 vs ASC 260 at a glanceIAS 33 vs ASC 260 at a glanceTOPICIFRSUS GAAPIf-converted for convertiblesRequiredRequiredTwo-class for participating sharesRequiredRequiredYear-to-date EPS from quartersNot allowedRequiredRebut share settlementNot allowedAwards onlyCash flow per shareNot allowedNot allowed
Converged methods; the differences are in interim and settlement details.
AreaIAS 33ASC 260
Year-to-date diluted EPSPotential shares determined independently for the year-to-date periodThe average of the incremental shares in each quarterly computation
Contracts the issuer may settle in cash or sharesPresumed settled in sharesPresumed settled in shares; for share-based payment awards, the presumption can be overcome by past practice or a stated policy of paying cash
Contracts the holder may settle in cash or sharesThe more dilutive of the twoThe more dilutive of the two
Participating securitiesTwo-class method, with limited guidanceTwo-class method, with detailed guidance, including how losses are allocated
Additional per-share amountsFrom 2027 under IFRS 18, in the notes only, using a total, subtotal or management-defined performance measureAllowed in the notes; cash flow per share is prohibited, and SEC rules govern non-GAAP per-share measures
Who must present EPSEntities whose ordinary shares are publicly traded, or are being issuedEntities with publicly traded common stock or potential common stock

An example: year-to-date diluted EPS

A company has 10,000 thousand shares outstanding and 3,000 thousand options with an exercise price of CU 8. Its average share price is CU 9 in the first quarter and CU 20 in the second, so CU 14.5 for the half year. Profit is CU 5,000 thousand in the first quarter and CU 7,000 thousand in the second. The EPS calculator (Excel) has a sheet for this year-to-date difference.

Half-year diluted EPSIAS 33ASC 260
Incremental shares, first quarter: 3,000 less 24,000 / 9Not used333
Incremental shares, second quarter: 3,000 less 24,000 / 20Not used1,800
Incremental shares for the half year1,345, using the CU 14.5 half-year average1,067, the average of the two quarters
Diluted shares11,34511,067
Diluted EPS: profit of CU 12,000 thousand / diluted sharesCU 1.06CU 1.08

Because the treasury stock method is not linear in the share price, the average of two quarterly computations is not the same as one computation at the average price: here US GAAP counts 278 thousand fewer incremental shares. The difference only arises in interim periods, and with steady share prices it is usually small. Annual diluted EPS under US GAAP is likewise the average of the four quarters, so annual figures can differ too.

How are convertible instruments treated?

Both use the if-converted method: interest after tax is added back to profit and the shares that would be issued are added to the denominator, unless the effect is antidilutive. Before ASU 2020-06, US GAAP allowed the treasury stock method for some convertibles that could be settled in cash; it now requires the if-converted method, assuming share settlement, which brings it into line with IAS 33. The classification of the instrument can still differ, because IAS 32 splits most convertible bonds into debt and equity while US GAAP usually carries them as a single liability, which changes the interest added back. See IAS 32 debt or equity.

What does IFRS 18 change?

IFRS 18, effective from 2027, amends IAS 33 so that a company may disclose additional per-share amounts only in the notes, and only if the numerator is a total or subtotal defined in IFRS 18 or a management-defined performance measure, with equal prominence for basic and diluted amounts. US GAAP has no equivalent change, although SEC rules govern non-GAAP per-share measures outside the financial statements. See IFRS 18 management-defined performance measures.

Where to go next

See IFRS vs US GAAP key differences, IAS 34 vs ASC 270 and IFRS 2 vs ASC 718.

Keep going

Our free Excel models work through the examples in these guides, and the comparisons show where IFRS and US GAAP part ways. Every guide names the Chartered Accountant who wrote it and the one who reviewed it.

All IFRS vs US GAAP guides Free Excel models

Questions people ask

What is the difference between IAS 33 and ASC 260?

They are largely converged; the main differences are how year-to-date diluted EPS is computed in interim periods, the treatment of share-based payment awards that may be settled in cash, and IFRS 18's rules on additional per-share amounts.

How is year-to-date diluted EPS calculated under US GAAP?

The incremental shares are the average of the incremental shares computed for each quarter, while IAS 33 computes the year-to-date period independently using the average price for that period.

Do IAS 33 and ASC 260 both use the if-converted method?

Yes. Since ASU 2020-06, US GAAP requires the if-converted method for all convertible instruments, as IAS 33 does.

Is cash flow per share allowed?

No. US GAAP prohibits reporting cash flow per share, and IFRS 18 only allows additional per-share amounts based on income statement totals, subtotals or management-defined performance measures.

Sources

The standards, updates and other documents this guide draws on.

  1. IFRS Foundation: IAS 33 Earnings per Share
  2. FASB Accounting Standards Codification: Topic 260, Earnings per Share
  3. KPMG US: Interim financial reporting, IFRS Accounting Standards compared to US GAAP

Rules and fees change. If you are reading this long after October 26, 2026, confirm the figures with the source before you rely on them.

IAS 33IAS 33 basic and diluted earnings per shareASC 260ASC 260 earnings per shareAccounting standardsIFRS vs US GAAP: the key differences in one guide

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This guide is general information. It is not tax or legal advice for your situation.