Chapter 5 Statement of Changes in

Equity
Related standard: PAS 1 Presentation of Financial Statements

Learning Objectives
• Prepare a Statement of Changes in Equity.
• Differentiate between Statement of Profit or Loss and Other
Comprehensive Income and Statement of Changes in Equity.
Statement of Changes in Equity

The statement of changes in equity shows the following

information:
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 component 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.
SCI vs. SCE

• “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 shared
characteristics and separating items with different characteristics.
Disclosure of dividends

• Dividends declared by an entity are disclosed either in the (a) notes

or (b) statement of changes in equity.
 APPLICATION OF CONCEPTS
 

PROBLEM 2: FOR CLASSROOM DISCUSSION

END