Statement Change of Equity
Statement Change of Equity
Statement Change of Equity
IN EQUITY
INTERMEDIATE
ACCOUNTING III
Statement of Changes in Equity
Equity (owners’, partners’, or shareholders’) represents the interest of the owners in the net
assets of an entity and shows the cumulative net results of past transactions and other
events affecting the entity since its inception. The statement of changes in equity reflects
the increases and decreases in the net assets of an entity during the period. In
accordance with PAS 1, all changes in equity from transactions with owners are to be
represented separately from nonowner changes in equity.
PAS 1 requires an entity to present a statement of changes in equity including the following
components on the face of the statement:
The amount of dividends recognized as distributions to equity holders during the period,
and the related amount per share should be presented either on the face of the statement
of changes in equity or in the notes.
According to PAS 1, except for changes resulting from transactions with owners (such as
equity contributions, reacquisitions of the entity’s own equity instruments, dividends, and
costs related to these transactions with owners), the change in equity during the period
represents the total amount of income and expense (including gains and losses) arising
from activities other than those with owners.
The following should be disclosed, either in the statement of financial position or the
statement of changes in equity, or in the notes:
ABC COMPANY
Statement of Changes in Equity
For the Year Ended December 31, 2021
In Thousand Pesos
Gain
Share Share Revaluation Retained Treasury Total
(Loss) on
Capital Premium Surplus Earnings Shares Equity
FA – OCI
Balances, 1/1/2021 8,000 2,500 800 23 3,000 200 14,123
Issue of new shares 1,200 300 1,500
Profit for the year 1,700 1,700
Cash dividends (450) (450)
Sale of treasury shares 20 60 (40)
Revaluation surplus
transferred to (40) 40 -
Retained Earnings
Decrease in fair value
(30) (30)
of FA-OCI
Balances, 12/31/2021 9,200 2,820 760 (7) 4,290 260 16,803
The important data affecting the retained earnings that should be clearly disclosed in the
statement of retained earnings is shown in the template below:
ABC COMPANY
Statement of Retained Earnings
For the Year Ended December 31, 2021
Except for prior period errors and change in accounting policy which are covered in
succeeding modules of this course, accounting for these data found in the Statement of
Changes in Equity (including Retained Earnings) were discussed in AE 211.