Statement of changes in equity and statement of financial position

In this lesson

1. 0:00 Statement of Changes in Equity format and structure
2. 3:00 Crimson example: building the statement step by step
3. 4:48 Statement of Financial Position: assets and liabilities
4. 7:09 Classifying assets and liabilities: current versus non-current
5. 9:06 Crimson example: preparing the complete statement
6. 14:15 Connecting all three statements in exam questions

About this lesson

This video walks you through the structure and logic of both documents, showing you how equity movements flow from one statement to the next, and how to classify and present assets, liabilities, and equity correctly on the statement of financial position. You'll see a complete worked example using the Crimson company data, demonstrating how to handle revaluations, dividends, profit for the year, and the critical balance check that total assets must equal total equity and liabilities. The statement of changes in equity tracks how your equity balances have moved during the period across categories like share capital, share premium, revaluation surplus, and retained earnings. You'll learn how to record opening balances, adjust for prior period errors or policy changes, add profit for the year, account for dividends and share issues, and handle revaluation transfers. The closing balances you calculate here feed directly into your statement of financial position. The statement of financial position presents your complete financial position at the year end, split into non-current and current assets, then equity and liabilities. This video explains the classification rules: assets and liabilities expected to settle within 12 months are current; those outside that window are non-current. You'll also see why presentation order matters—least liquid items first—and why you must prepare these statements in sequence: profit and loss first, then changes in equity, then financial position. Get the order right and your numbers will balance.

Duration: 15m