Professional Documents
Culture Documents
Changes in Equity
Learning Objectives
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
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 same characteristics and separating items with
different characteristics.
Illustration 1
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