The statement of changes in equity is required:
A)because IAS 1 deals with income and does not define profit.
B)to show profit and loss for the period.
C)to summarise the large number of transactions that take place on the statement of profit and loss.
D)to provide a reconciliation of opening and closing equity, and also to provide details of the various equity accounts that are impacted by the period's total comprehensive income.

Question

Quizplus · Accepted Answer

The statement of changes in equity provides a reconciliation of opening and closing equity, and also provides details of the various equity accounts that are impacted by the period's total comprehensive income. It is necessary to show how comprehensive income for the period is allocated between different components of equity, such as retained earnings, share capital, and reserves. This statement complements the statement of profit and loss, which only reports the net profit or loss for the period.

The Statement of Changes in Equity Is Required