Statement of shareholders' equity
The statement of shareholders' equity is the financial statement that details changes to the equity portion of the balance sheet, including retained earnings, common and preferred shares (as well as treasury stock), and other comprehensive income.
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The last portion of the balance sheet is the equity portion. This is usually broken down into several lines, including retained earnings, additional capital, value of shares, etc. The statement of shareholders' equity shows how these balances were arrived at and how they changed over the previous term.
To illustrate, let's use Coca-Cola's statement from its 10-K for 2007.
Here is the equity portion of the balance sheet:
| Common stock, $0.25 par value; Authorized—5,600 shares;
Issued—3,519 and 3,511 shares, respectively
|$ 880||$ 878|
|Accumulated other comprehensive income (loss)||626||(1,291)|
|Treasury stock, at cost—1,201 and 1,193 shares, respectively||(23,375)||(22,118)|
|TOTAL SHAREOWNERS’ EQUITY||$21,744||$16,920|
Here is the corresponding section from its statement of shareholders' equity. Note how this breaks down each line item, showing how each changed from 2006 to 2007.
|Balance at beginning of year||$ 878|
|Stock issued to employees exercising stock options||2|
|Balance at end of year||880|
|Balance at beginning of year||5,983|
|Stock issued to employees exercising stock options||1,001|
|Tax (charge) benefit from employees’ stock option and restricted stock plans||(28)|
|Stock purchased by former shareholders of glacéau||113|
|Balance at end of year||7,378|
|Balance at beginning of year||33,468|
| Adjustment for the cumulative effect on prior years
of the adoption of Interpretation No. 48
|Dividends (per share—$1.36 in 2007)||(3,149)|
|Balance at end of year||36,235|
|Accumulated other comprehensive income (loss)|
|Balance at beginning of year||(1,291)|
|Net foreign currency translation adjustment||1,575|
|Net gain (loss) on derivatives||(64)|
|Net change in unrealized gain on available-for-sale securities||14|
|Net change in pension liability||392|
|Balance at end of year||626|
|Balance at beginning of year||(22,118)|
|Stock issued to employees exercising stock options||428|
|Stock purchased by former shareholders of glacéau||66|
|Purchases of treasury stock||(1,751)|
|Balance at end of year||(23,375)|
|TOTAL SHAREOWNERS' EQUITY||$21,744|