Earnings per Share Accounting Policy disclosed by Bajaj Finance Limited

Ind AS 1 was amended with effect from 1 April 2023 to replace the requirement to disclose significant accounting policy with disclosure of material accounting policy information. The amendment also provided the principles for assessing whether an accounting policy is material accounting policy. This post compares the accounting policy on Earnings per Share disclosed by Bajaj Finance Limited in the financial statements before and after the amendment.

Earnings per Share
Basic EPS is calculated in accordance with Ind AS 33 'Earnings per share' by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. Diluted EPS is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares of the Company.
(Bajaj Finance Limited Financial Year Ended 31 March 2023)

Analysis for Material Accounting Policy Information:
Primary condition – Accounting policy relates to material transaction, other event or condition:
Ind AS 33, Earnings per Share, requires disclosure of earnings per share information in profit or loss. Therefore, primary condition is met.

Secondary conditions – Any one of these need to be met:
1. The company changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements – No. The company cannot change its accounting policy on earnings per share as there has been no amendment to Ind AS 33 in this regard.
The company chose the accounting policy from one or more options permitted by Ind AS – No. Ind AS 33 does not permit any accounting policy choice for earnings per share.
2. Accounting policy was developed in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors – No. Ind AS 33 specifically applies to Earnings per Share. Therefore, in accordance with paragraph 7 of Ind AS 8, the company shall apply the requirements of Ind AS 33.
3. The accounting policy relates to an area for which an entity is required to make significant judgements or assumptions in applying an accounting policy, and the company discloses those judgements or assumptions in accordance with paragraph 122 and 125 of Ind AS 1. – No. The company has not disclosed earnings per share as an item in the note on critical accounting estimates and judgements.
4. The accounting is complex such that the company applies more than one Ind AS to a class of material transactions – No. The accounting for earnings per share requires application of only Ind AS 33.
5. The disclosure of accounting policy is required by a standard. – No. Ind AS 33 does not require disclosure of accounting policy on earnings per share.

Conclusion:
As only the primary condition is met, the company need not disclose the accounting policy on earnings per share in its material accounting policy information.

Disclosure in Financial Statements for the year ended 31 March 2025:

It may be noted that the financial statements of the company for the year ended 31 March 2025 do not include the policy on earnings per share which shows that the company has made changes in its accounting policies to disclose only material accounting policy information.