Dfs

sainty

does anyone know how to complete the new Consolidated Statement of Changes in Equity. there isn't much in the Osbourne Books about it.i know how to complete the other consolidated pro formas for income and statement of financial position.

sdv

See the attached doucemnt published by AAT

aimeexox

On number 3 of that attachment (Statement of changes in equity) can someone please tell me when and where that is supposed to be used? Just added onto the bottom of the statement of financial position?

Rinske

At the bottom of the income statement according to my book.

Esme

Is this exam going to be totally different from all the past ones I've been practising? Are we likely to have to do a statement in changes of equity and statement of comprehensive income?

aimeexox

Why does it go at the bottom of the income statement? Cause its got share capital, other reserves and retained earnings? Isn't that normally what you'd put on the bottom of the SOFP to come back to the net assets figure?

I really hope they don't just throw all these proformas into the exam paper..

Rinske

What you mean to put on the bottom of the SFOP is the equity section, that balances it.
That has now moved up higher, as liabilities and equity section have basically swapped place.

The statement of changes in equity demonstrates how profit for the year is added to the brought forward balance of retained earnings, while dividends paid are deducted the result is shown in the SOFP (almost literally quoted from the Osborne book)

It can be shown in different forms, but as far as I know, you will get a proforma for it in the June exam (and I do hope so).

aimeexox

I know I sound really thick, sorry!! So does that mean the changes in equity is really just the retained earnings working but in a different layout? Share capital + Retained earnings b/f + profit from income statement - dividends. I don't have the osbourne book, only the kaplan one and I didn't know about this statement of changes in equity until this week! So i think the panic is clouding my knowledge on things!

Rinske

Well, you probably had a look at the file and noticed it just has the balance to date, changes in equity which contains the profit for the year, dividends paid during the year, and if it happens changes in share capital and then just the new balance, which is what you bring over to the SOFP.

So yes, it basically is the retained earnings in a different format.

I know the panic feeling, but I do think you'll be fine with this, as it's a matter of putting the figures in to get to the new retained earnings, which you did already, so it's just a matter of getting used to the new layout and do the same thing for the rest most likely!