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What is the statement of changes in equity?

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The statement of changes in equity is a financial statement that reports all changes to a company’s owners’ equity over an accounting period, including total comprehensive income, owners’ contributions and withdrawals, dividends and treasury share transactions.

Statement of Changes in Equity
      Equity (beginning of period)
+/− Effects from Restatements (IAS 8)
      Adjusted equity (beginning of period)
+/− Other Comprehensive Income
+/− Net Income
+/ Transactions with Owners                
=    Equity (end of period)

The statement is a reconciliation of the beginning and ending balances in a company’s equity during a reporting period and may show such details as:

  • Correction for prior period errors;
  • Adjustment for changes in accounting policy;
  • Revaluation adjustments;
  • Surplus or deficit for the period;
  • Distributions to owners;
  • Returns of capital;
  • Appropriations (equity injections);
  • Restructuring;
  • Contributions by owners; and
  • Transfers between equity components.

US GAAP does not require a statement of changes in equity, it requiring instead that changes in each caption of stockholders’ equity be presented in either a footnote or a separate statement.  IFRS requires a statement of changes in equity which presents specific line items.

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