Changes In Equity Report
This section describes the fields and descriptions on the Changes In Equity report.
The Statement of Changes in Equity Report is a new report designed to display how a company’s equity stock changes throughout the course of each financial year. The report is becoming a statutory requirement in an increasing number of countries. Portugal is one of these countries. However, the report is designed to be standard rather than a country-specific report, and will be usable by other countries as statutory requirements dictate.
The report consists of a single tab displaying one table of data. It utilizes a number of columns that can vary from company to company, depending on what equities they work with. Generally, one of the columns should be Retained Earnings.
An example could be the following columns:
| Share Capital | Statutory Reserve | Other Reserve | Retained Earnings |
For each of these, the following are stated:
- Opening balance as of the beginning of the financial year.
- Changes to the equity made during the financial year. These are actually individual finance transactions that display how equity may be moved between the column. For example, the company can choose to move some of their profit to Share Capital. In this case, you can see the amount subtracted under Retained Earnings and added to Share Capital.
- Result of the Year / Result of the Period.
- Closing Balance, which is the Opening Balance + Changes + Result of the Year.
| USD [Section on currency] | ||||
| 1 Trifolium [Section on company number and name] | ||||
| 2017 [Section on fiscal year] | ||||
| Share Capital | Statutory Reserve | Other Reserve | Retained Earnings | |
| Opening Balance | ||||
| Result of the Year | 2.400.000,00 | |||
| Closing Balance | 2.400.000,00 | |||
| 2018 | ||||
| Share Capital | Statutory Reserve | Other Reserve | Retained Earnings | |
| Opening Balance | 2.400.000,00 | |||
| Result of the Year | 2.700.000,00 | |||
| Establishing Stock Capital | 4.000.000,00 | -4.000.000,00 | ||
| Closing Balance | 4.000.000,00 | 1.100.000,00 | ||
| 2019 | ||||
| Share Capital | Statutory Reserve | Other Reserve | Retained Earnings | |
| Opening Balance | 4.000.000,00 | 1.100.000,00 | ||
| Result of the Year | 1.980.000,00 | |||
| Adding profit to Sharing Capital | 2.000.000,00 | -2.000.000,00 | ||
| Distributing to Share Owners | -200.000,00 | |||
| Moving some profit to Special Reserve | 1.000.000,00 | -1.000.000,00 | ||
| Moving some share stock to Other Reserve | 500.000,00 | -500.000,00 | ||
| Closing Balance | 5.000.000,00 | 1.000.000,00 | -500.000,00 | -120.000,00 |
Data is divided by:
- Currency
- Company Number and Name
- Fiscal Year
The table is a cross-tab table where the columns are driven by a reporting structure, using the dimension field Grouping Level 1.The rows are statically defined and some dynamically.
The statically defined rows are:
- Opening Balance: Shows the opening balance for the group of accounts in each column of the table.
- Result of the Year / Result of the Period: Shows the P&L result of the year or result of the period with retained earnings added.
- Closing Balance : Shows the closing balance.
The dynamic rows are individual finance postings where we use the Entry Text as label for the row and the balance as value. In the example above, for 2019 "Adding profit to Share Capital", "Distribution to Share Owners", "Moving some profit to Special Reserve", and "Moving some share stock to Other Reserve" constitute this sequence of postings.
The closing balance is the sum of the figures appearing in each column.
Transaction Scenarios and Examples
Data scenario 2017: First business year
In the first business year, all we have is an opening balance of zero and some profit/loss that gives a profit in the end. In this case, we do not have any equity changes as such.| 2017 | Share Capital | Statutory Reserve | Other Reserve | Retained Earnings |
| Opening Balance | 0,00 | 0,00 | 0,00 | 0,00 |
| Result of the Year | 2.400.000,00 | |||
| Closing Balance | 0,00 | 0,00 | 0,00 | 2.400.000,00 |
Data scenario 2018: Establishing of share capital
In the second business year, we have an opening balance of 2.400.000,00. This year, the company has a bit more profit, namely 2.700.000,00 and this year the board has decided to move some of the profit to establish a share capital for stockowners. They have decided to establish a total of 4.000.000,00 which is thus deducted from the Retained Earnings column and added to the Share Capital column.
| 2018 | Share Capital | Statutory Reserve | Other Reserve | Retained Earnings |
| Opening Balance | 0,00 | 0,00 | 0,00 | 2.400.000,00 |
| Result of the Year | 2.700.000,00 | |||
| Establishing Stock Capital | 4.000.000,00 | -4.000.000,00 | ||
| Closing Balance | 4.000.000,00 | 0,00 | 0,00 | 1.100.000,00 |
Data scenario 2019: Distribution to Shareholders and Reserves
In the third business year, we have an opening balance of 1.100.000,00. This year, the company has profit of 1.980.000,00 and decides to move 2.000.000,00 to share capital, 1.000.000,00 to Special Reserve and distribute 200.000,00 to share owners.
| 2019 | Share Capital | Statutory Reserve | Other Reserve | Retained Earnings |
| Opening Balance | 4.000.000,00 | 0,00 | 0,00 | 1.100.000,00 |
| Result of the Year | 1.980.000,00 | |||
| Adding profit to Share Capital | 2.000.000,00 | -2.000.000,00 | ||
| Distributing to Share Owners | -200.000,00 | |||
| Moving some profit to Special Reserve | 1.000.000,00 | -1.000.000,00 | ||
| Moving some share stock to Other Reserve | 500.000,00 | -500.000,00 | ||
| Closing Balance | 5.500.000,00 | 1.000.000,00 | -500.000,00 | -120.000,00 |