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Chapter 11

Statement of changes in equity

The statement of changes in equity shows the change in equity from the beginning of
the year to the end of the year. Equity is the shareholders’ capital in the company
and comprises of shares capital and reserves. Increases in equity may result from:

 Share issues.

 Total comprehensive income.

Decreases in equity may result from:

 Dividends paid in the accounting year.

A full example of a statement of shares of equity is as follows:

Ordinary Share Revaluation Retained
shares premium surplus earnings Total

Opening balance X X X X X

Total comprehensive X X X
income

Dividends (X) (X)

Shares issued X X

Closing balance X X X X X

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