AGZ is a listed entity. You are a member of the team drafting its financial statements for the year ended 31 August 2008.
Extracts from the draft income statement, including comparative figures, are shown below:

At the beginning of the financial year, on 1 September 2007, AGZ had 750 million ordinary shares of 500 in issue. At that date the market price of one ordinary share was 87.60.
On 1 December 2007, AGZ made a bonus issue of one new ordinary 500 share for every three held.
In 2006, AGZ issued $75 million convertible bonds. Each unit of $100 of bonds in issue will be convertible at the holder's option into 200 ordinary 500 shares on 31 August 2012. The interest expense relating to the liability element of the bonds for the year ended 31 August 2008 was $6.3 million (2007 - $6.2 million). The tax effect related to the interest expense was $2.0 million (2007 - $1.8 million).
There were no other changes affecting or potentially affecting the number of ordinary shares in issue in either the 2008 or 2007 financial years.
Required:
(a) Calculate earnings per share and diluted earnings per share for the year ended 31 August 2008, including the comparative figures.
(b) Explain the reason for the treatment of the bonus shares as required by IAS 33 Earnings per Share.

Profit before tax Income tax expense Profit for the period Smillion 276.4 85.0 191.4 2007 Smillio 262 7 80.0 1827