Scribd
Upload
194 views

Notes To Financial Statement Meaning

The statement of changes in equity reconciles the beginning and ending balances of a company's equity during a reporting period. It starts with the beginning equity balance and adds or subtracts items like net income and dividend payments to arrive at the ending balance. Common items that appear include net profit/loss, dividend payments, stock proceeds, treasury stock purchases, and equity effects of prior period errors or asset fair value changes. The statement can be presented separately or added to another statement, and may provide expanded disclosure of equity elements.

Uploaded by

Chincel G. ANI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
194 views

Notes To Financial Statement Meaning

The statement of changes in equity reconciles the beginning and ending balances of a company's equity during a reporting period. It starts with the beginning equity balance and adds or subtracts items like net income and dividend payments to arrive at the ending balance. Common items that appear include net profit/loss, dividend payments, stock proceeds, treasury stock purchases, and equity effects of prior period errors or asset fair value changes. The statement can be presented separately or added to another statement, and may provide expanded disclosure of equity elements.

Uploaded by

Chincel G. ANI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Statement to Changes in Equity

The statement of changes in equity is a reconciliation of the beginning and ending balances in a
company’s equity during a reporting period. It is not considered an essential part of the
monthly financial statements, and so is the most likely of all the financial statements not to be
issued. However, it is a common part of the annual financial statements. The statement starts
with the beginning equity balance, and then adds or subtracts such items
as profits and dividend payments to arrive at the ending balance. The general calculation
structure of the statement is:

Beginning equity + Net income – Dividends +/- Other changes

 = Ending equity

The transactions most likely to appear on this statement are as follows:

 Net profit or loss


 Dividend payments
 Proceeds from the sale of stock
 Treasury stock purchases
 Gains and losses recognized directly in equity
 Effects of changes due to errors in prior periods
 Effects of changes in fair value for certain assets

The statement of changes in equity is most commonly presented as a separate statement, but can
also be added to another financial statement.

It is also possible to provide a greatly expanded version of the statement that discloses the
various elements of equity. For example, it could separately identify the par value of common
stock, additional paid-in capital, retained earnings, and treasury stock, with all of these elements
then rolling up into the ending equity total.

Notes to Financial Statement


Detailed text provided as a supplement to the balance sheet, income statement, and statement
of changes in financial position in a company's annual report to provide added facts and/or
clarify unusual items or entries on the statements. These notes also provide valuable information
to shareholders, such as accounting methodologies used in preparing the statements and details
of pension plans, which affect the shareholders' investment in the company. They are placed after
the statements so they do not obscure the data in the statements. Also referred to as footnotes.
These provide additional information pertaining to a company's operations and financial position
and are considered to be an integral part of the financial statements. The notes are required by the
full disclosure principle.

You might also like