Statement of changes in equity

The Statement of Changes in Shareholders' Equity (DMPL) is an accounting report that aims to show changes in a company's shareholders' equity over a given period of time. It is one of the mandatory financial statements for publicly traded companies, but it can also be used by privately held companies as an internal analysis tool. The DMPL consists of a series of information that allow users of financial statements to understand how the company's equity has changed over the period. It presents, in summary form, the main accounts that make up shareholders' equity, such as share capital, profit reserves, treasury shares, among others. The structure of the DMPL is divided into two main parts: the first part presents the changes that occurred in the equity accounts, while the second part shows the origins and applications of the resources that caused these changes. This structure allows users to identify which were the main sources of funds that influenced the company's equity. In the first part of the DMPL, the variations occurred in the shareholders' equity accounts are presented. For example, if the company carried out a new issue of shares, the amount corresponding to that issue will be presented as an increase in share capital. Likewise, if the company distributed dividends to shareholders, the corresponding amount will be presented as a decrease in earnings reserves. In the second part of the DMPL, the origins and applications of the resources that caused these variations are demonstrated. For example, if the company obtained funds through a bank loan, this amount will be presented as a source of funds. On the other hand, if the company used these resources to acquire a new asset, such as a property, this value will be presented as an application of resources. The DMPL may also present other relevant information for the analysis of the company's shareholders' equity, such as the movement of profit reserves, carrying out equity valuation adjustments, among others. This information is important for financial statement users to understand how the company is managing its resources and making strategic decisions. In summary, the Statement of Changes in Shareholders' Equity is an accounting report that presents changes in a company's shareholders' equity over a given period of time. It allows users of financial statements to understand how the company's equity has changed and what were the main sources of funds that influenced these changes. The DMPL is an important tool for analyzing a company's financial and strategic performance.

Next page of the Free Ebook:

11Analysis of financial statements

2 minutes