Chapter 5

• Equity


  Residual interest in the assets of an entity after deducting all of the liabilities.
• Equity


  Equivalent of net assets
• Share capital


  Funds contributed by shareholders equal to the par or stated value
• Share premium


  Funds contributed by shareholders in excess of par or stated value
• Retained earnings


  May be appropriated or unappropriated
• Statement of changes in equity


  A formal statement that shows the movements in the elements or components of the shareholder's equity
• Statement of changes in equity shows:

  1. Comprehensive income for the period.
  2. For each component of equity, the effects of changes in accounting policies and correction of errors.
  3. For each component of equity, a reconciliation between the carrying amount at the beginning and end of the period, separately disclosing changes from:

  a. Profit or loss

  b. Each item of comprehensive income

  c. Transactions with owners inn their capacity as owners showing separately contributions by and distributions to owners.
• Reserves


  Includes share premium, retained earnings appropriated, revaluation surplus and other comprehensive income.
• PAS 1


  Doesn't require the disclosure of retained earnings.
• SEC Memorandum


  Requires the disclosure of retained earnings.