Statement of Changes in Equity
A report showing how shareholders' equity changed during a period through profit, dividends, and capital movements.
The Statement of Changes in Equity (SOCE) reconciles the opening and closing equity balances, showing every movement during the period: net profit or loss from the income statement, dividends declared, share issues or buybacks, and other comprehensive income.
This statement is required under both IFRS and MPERS and bridges the income statement to the balance sheet. It answers: how did the owners' stake in the business change this period?
For growing companies, the SOCE reveals important information about capital management — how much profit is being retained versus distributed, whether new shares were issued (dilution), and the impact of foreign currency movements on consolidated equity.
In practice, the SOCE is most scrutinised during fundraising and due diligence, where investors want to understand the history of capital injections, shareholder loans, and retained earnings.
Related Terms
A snapshot of a company's assets, liabilities, and equity at a specific point in time.
A financial report summarising revenue, costs, and profit over a specific period.
The global accounting framework used in 140+ countries for preparing financial statements.
The simplified accounting framework for private companies in Malaysia, based on IFRS for SMEs.
Further Reading
A founder and CFO guide to financial due diligence — what sophisticated investors examine, common red flags, and how to prepare your business.
Not sure what financial reports your Malaysian business needs? This simple guide explains P&L, balance sheets, and cash flow statements in plain language.