Changes in Statement of Equity

Question 1

What is the format for the Statement of changes in stockholder’s equity?

Answer 1

1. column headings identify individual stockholder’s equity accounts
2. events changing stockholder’s equity accounts are listed chronologically to the left
3. the body of the statement is presented in terms of the dollar impact of various transactions and events
4. the impact of the transactions on the number of shares of stock, if any, is presented in the description to the left
5. the ending balances tie to the items presented in the stockholder’s equity section f the BS on the same dates
   See 2134.01 for example

Question 2

What is the similarities between GAAP and IFRS in regards to statement of changes in stockholder’s equity?

Answer 2

1. Both use the term “retained earnings”

Question 3

What is the dissimilarities between GAAP and IFRS in regards to statement of changes in stockholder’s equity?

Answer 3

1. IFRS uses the term “reserve” for comprehensive income items and for transactions related to convertible debt and stock option contracts. GAAP does not use the term “reserve”
2. IFRS includes a “revaluation surplus” related to revaluation of property, plant and equipment; mineral resources and intangible assets
3. IFRS uses different stock titles than GAAP. Instead of common stock, IFRS uses “Share capital”
4. IFRS, preferred shares (Preference Share) are accounted for in a manner similar to common stock. They have no maturity date, reported at par value with any premium reported as “Share premium”
5. IFRS accounts for treasury stock retirements only by charging an excess in purchase price and issue cost to paid-in capital