The statement of changes in equity, also known as the movement of equity statement, is a financial report that outlines the changes in a company’s equity over a specific period. It provides a detailed account of how various factors, such as profits, losses, dividends, and capital contributions, have affected the equity section of the balance sheet.

Key Components of a Movement of Equity Statement
Opening Balance: The equity amount at the beginning of the reporting period.
Contributions from Owners: Any additional capital invested by the owners or shareholders during the period.
Comprehensive Income: This includes:
Net Income: The profit or loss from the income statement.
Other Comprehensive Income: Gains or losses not included in net income, such as foreign currency translation adjustments or unrealized gains on investments.
Dividends Paid: Cash or stock dividends distributed to shareholders during the period, which decrease equity.
Closing Balance: The total equity at the end of the reporting period, calculated by adjusting the opening balance for all contributions, comprehensive income, and distributions.
Purpose of a Movement of Equity Statement
Transparency: It provides stakeholders with a clear view of how equity is being affected by the company’s operations and financing activities.
Performance Metrics: Investors can assess how well the company is managing its equity and the returns being generated for shareholders.
Decision-Making: It aids management and investors in making informed decisions regarding capital structure and dividend policies.
Example of a Movement of Equity Statement
Statement of Changes in Equity
For the Year Ended 2024
Opening Balance $50,000
Contributions from Owners $10,000
Net Income $15,000
Other Comprehensive Income $2,000
Dividends Paid ($5,000)
Closing Balance $72,000
In summary, the movement of equity statement is an essential financial document that provides insights into changes in ownership interest over time, reflecting the company’s financial performance and decisions made by its management.