Chapter 7 SP – O/S (Original Issuance)

Statement of ₱ xx
SP – P/S xx
SP – T/S (reissuance)
Changes in Equity xx
SP – C/P xx
SP – Conversion (actual) xx
1. Equity SP – D/C xx
- residual interest SP – Expired/Unexercised xx
(Total Assets - Total Liabilities) SP – Others xx
- Net assets SOO xx
SWO xx
SUBCLASSIFICATIONS FWO xx
TOTAL SP/APIC
A. SHARE CAPITAL – Funds contributed by ₱ xx
shareholders equal to par or stated value
C. RETAINED EARNINGS - Unappropriated or
O/S @ par ₱ xx Appropriated
P/S @ par xx
Subscribed O/S, net @ par Retained Earnings, beg ₱ xx
xx Net Income/Loss xx
Subscribed P/S, net @ par Dividends xx
xx Appropriations
Stock Dividends Payable xx xx
TOTAL SC/PAID-UP CAPITAL Reversal – appropriation xx
₱ xx Prior-period Errors xx
Changes in Accounting Policy xx
B. SHARE PREMIUM – Funds contributed by Reclassifications – OCI xx
shareholders in excess of par of stated value  UG/UL – OCI xx
 Rev. Surplus xx
Quasi-Recognition xx  Retirement
Share Transactions (xx)
xx Retained Earnings, end ₱ xx
 T/s reissued BELOW COST
(xx)

2. Statement of Changes in Equity

- formal statement: shows the movements in the elements or components of the SHE
- entity: shall present a SCE showing:
a. Comprehensive Income for the period
b. For each component of equity, the effects of changes in accounting policies and
correction of errors
c. For each component of equity, a reconciliation between the carrying amount at the
beginning and end of the period, separately disclosing changes from:
1. Profit or Loss
2. Each item of OCI
3. Transactions with owners in their capacity as owners showing separately
contributions by and distributions to owners.
 COMPANY NAME
Statement of Changes in Equity
Year Ended December 31, 20x1
Share Capital Reserves Retained Earnings
Balances – January 1 xxx xxx xxx
Correction of prior period xxx/(xxx)
error
Change in Accounting xxx/(xxx)
Policy
Issuance of O/S xxx xxx (Share Premium, if
any)
Issuance of P/S xxx xxx (Share Premium, if
any)
Comprehensive Income
Net Income xxx/(xxx)
OCI xxx/(xxx)
Dividends declared during (xxx)
the year
Current appropriation for xxx (xxx)
contingencies
Balances – December 31 xxx xxx xxx
3. Statement of Retained Earnings
- shows the changes affecting directly the retained earnings of an entity
- NOW PART OF THE STATEMENT OF CHANGES IN EQUITY
- Clearly disclosed in SRE:
a. Net Income or Loss for the period
b. Prior Period Errors – adjustment to RE-beg
c. Dividends declared and paid to shareholders – deducted from RE
d. Effect of change in accounting policy
e. Appropriation of Retained Earnings - adjustment to RE-beg
A. RETAINED EARNINGS – APPROPRIATED
- deducted from the unappropriated balance of RE
- appropriation = charged, therefore, reverted or added back to unappropriated balance of
RE
- may be appropriated when:
1. Legal Requirement (TS)
2. Contractual Requirement (Bond Redemption)
3. Entity Policy (Appropriation for Contingencies)