1.

Prepare a Statement of Changes in Equity

2. Differentiate between Statement of Profit or
Loss and The Comprehensive Income and
Statement of Changes in Equity
a. Effects of change in accounting policy (retrospective
application) or correction of prior period error
(retrospective restatement);
b. Total comprehensive income for the period; and
c. For each statement of equity, a reconciliation between
the carrying amount at the beginning and the end of
the period, showing separately changes resulting from:
i. Profit or loss;
ii. Other comprehensive income; and
iii. Transactions with owners, e.g., contributions by
and distributions to owners.
Note:
“Non-owner” changes in equity are presented in the
statement of comprehensive income while “owner”
changes (e.g., contributions by and distributions to
owners) are presented in the statement of changes in
equity. This is to provide better information by aggregating
items with characteristics and separating items with
different characteristics.
Entity A’s equity as of Dec. 31, 20x0 consists of the following:
Share capital 1,000,000
Retained earnings 700,000
Revaluation surplus 300,000
Total shareholders’ equity 2,000,000

The following occurred during 20x1 and 20x2:

20x1:
• Entity A reported profit of P200,000 and total comprehensive
income of P220,000.
20x2:
• Entity A issued additional shares with an aggregate par value of
P500,000.
• Entity A reported other comprehensive income of P50,000 and total
comprehensive income of P350,000.
• Entity A declared dividends of P100,000.

Requirement: Prepare the comparative Statement of Changes in Equity

for the year ended Dec. 31, 20x2.
The ledger of ABC Co. in 20x1 includes the following:
Share capital 100,000
Share premium 20,000
Retained earnings, appropriated 18,000
Retained earnings, unappropriated 42,000
Revaluation surplus 30,000
Remeasurements of the net defined
benefit liability (asset)-gain 15,000
Cumulative net unrealized gain on
fair value changes of investment in FVOCI 23,000
Effective portion of losses on hedging instruments
in a cash flow hedge 10,000
Cumulative translation loss on foreign operation 5,000
Treasury shares, at cost 13,000
Requirement: Compute for the total shareholders’ equity
Share capital 100,000
Share premium 20,000
Retained earnings, appropriated 18,000
Retained earnings, unappropriated 42,000
Revaluation surplus 30,000
Remeasurements of the net defined
benefit liability (asset)-gain 15,000
Cumulative net unrealized gain on
fair value changes of investment in FVOCI 23,000
Effective portion of losses on hedging instruments
in a cash flow hedge (10,000)
Cumulative translation loss on foreign operation (5,000)
Treasury shares, at cost (13,000)
Total Shareholders’ Equity 220,000