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Owner changes in equity

Examples include issuing shares, purchasing the entity’s own shares and distributions such as dividends. These movements are presented in the statement of changes in equity and are distinct from income and expenses and total comprehensive income. A balance such as retained earnings is not itself an owner transaction; its movements must be analysed by cause. The distinction applies even though both types of movement affect total equity.

Worked example

A company issues ordinary shares for $100,000 and pays a $20,000 dividend. These are owner transactions in the statement of changes in equity; neither amount is revenue or expense in profit or loss.

Common mistake

Including dividends in expenses or treating all changes in retained earnings as transactions with owners.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA FR Direct September 2026–June 2027
ACCA SBR Supporting September 2026–June 2027