Understanding the intent of this report, not the format
The statement of changes in equity report (SOCE) continues to baffle.
The question that we often get asked is
"Does Xero have a statement of changes in equity?"
The answer = YES
The report is compliant with AASB 101 presentation of financial statements.
And it is fully automated.
If an auditor is certain that it must be in XYZ format, then you can use the "custom" version.
We have written a document examining the SOCE
What is SOCE about?
Something to remember about this report is, the intent.
The intent is to link the statement of profit & loss & comprehensive income and the statement of financial position.
According to one of our registered company auditors:
- It must display the totals of profit for the period and other comprehensive income,
- The total equity in the balance sheet should be readily visible to the reader of the SOCE as they follow the numbers between statements.
- The SOCE is meant to be read as a link between the Statement of Comprehensive Income and the Statement of Financial Position.
- The need for it became a matter discussed by standard setters a long time ago
- For example after the ability to have the appropriation account showing at the bottom of the Profit and Loss Statement was removed.