C. When more than one basis of conversion of dilutive potential ordinary shares exists, the calculation assumes the most advantageous conversion rate or exercise price from the standpoint of the holder of the potential ordinary shares.

According to IAS 34 - Earnings Per Share, when calculating diluted earnings per share, it is necessary to consider the potentially dilutive effects of convertible instruments like options and warrants. If there are multiple bases for conversion or exercise, the calculation should assume the most disadvantageous conversion or exercise rate from the perspective of the holder of the potential ordinary shares, not the most advantageous one (option B is incorrect because the calculation should assume the most disadvantageous conversion for the holder, not the most advantageous).

Option A is incorrect because potential ordinary shares that are cancelled or allowed to lapse during the period should still be considered in the diluted earnings per share calculation for the period they were outstanding, even if it's only for part of the year.

Option D is incorrect because IAS 33 states that potential ordinary shares that would have an antidilutive effect on basic earnings per share are not assumed to be converted, exercised, or otherwise issued in the calculation of diluted earnings per share; they are not included in the diluted earnings per share calculation.