Would completely vested options to purchase shares of a company be included in the computation of Basic EPS? BC Limited has formulated a scheme for…

15,000 shares that have vested at December 31, 2026 would not be included in the computation of Basic EPS of BC Limited for the year then ended. Paragraph 15 of the Statement states that "For the purpose of calculating basic earnings per share, the number of equity shares should be the weighted average number of equity shares outstanding during the period." As the vesting of shares can not be considered as shares being outstanding, shares that have vested would not be included in the computation of basic EPS. Paragraph 21 of the Statement also gives this indication since for inclusion of contingently issuable shares in the computation of basic earnings per share all necessary conditions under the contract should have been satisfied. As the employees are yet to exercise their option to purchase, which is one of the necessary condition of the contract, these shares would not be included in the computation of Basic EPS However, the entire 36,000 shares should be considered for inclusion in the computation of Diluted EPS (refer paragraph 7 (c) of the Statement).