The Statement of Changes in Equity or ECPN for its acronym, is one of the financial statements that includes the general accounting plan. The statement of changes in equity is relatively new, it was introduced as mandatory for all companies except SMEs in 2007, with the modification of the General Accounting Plan (PGC) approved by Royal Decree 1515/2007.
The ECPN is, therefore, mandatory for all companies and must be drawn up when preparing corporate tax and closing the annual accounts for presentation in the commercial register. The statement of changes in equity is made up of two parts: the statement of recognized income and expenses and the total statement of changes in equity.
Parts of the Statement of Changes in Equity
According to the general accounting plan, these are each of the parts that make up the ECPN:
Statement of recognized income and expenses
This statement includes the changes recorded throughout the accounting year in the net worth derived from the following operations:
- The result for the year reflected in the profit and loss account
- Income and expenses charged directly to equity. As long as they are in accordance with the rules for recording and evaluating the general accounting plan.
- Transfers of income and expenses made to the profit and loss account. According to the norms of the PGC.
Total statement of changes in equity
This financial statement includes an analysis of the movements made throughout the year in the items corresponding to equity. Therefore, the movements caused by the following operations will be included:
- Total balance of expenses and income.
- Variations in equity due to operations with partners.
- Adjustments due to changes in accounting criteria.