Statement of changes in equity
The statement explains the changes in a company's share capital, accumulated reserves and retained earnings over the reporting period.It breaks down changes in the owners' interest in the organization, and in the application of retained profit or surplus from one accounting period to the next.Line items typically include profits or losses from operations, dividends paid, issue or redemption of shares, revaluation reserve and any other items charged or credited to accumulated other comprehensive income.The statement is expected under the generally accepted accounting principles and explains the owners' equity shown on the balance sheet, where: owners' equity = assets − liabilitiesIn the United States this is called a statement of retained earnings and it is required under the U.S. Generally Accepted Accounting Principles (U.S. GAAP) whenever comparative balance sheets and income statements are presented.Retained earnings are part of the balance sheet (another basic financial statement) under "stockholders equity (shareholders' equity)" and is mostly affected by net income earned during a period of time by the company less any dividends paid to the company's owners / stockholders.