 we are going to discuss statement of changes in equity. Now, this is basically a new statement which used to call previously retained earning statements, but now it's a new name and in this particular statement we call have ordinary shares which you call common shares reported at par. If there is any premium on it that should be reported separately then we have the retained earnings. These are the profits which are accumulated over a number of years after taking out any dividend paid. Revaluation reserve, when we do some revaluation of assets only then we record this revaluation reserve and this is not going to stay in this report forever. Ultimately, when that asset is used up these reserves will be reversed to the retained earnings. Why the balance sheet balance? Because assets are equal to liabilities plus equity. So, two sides of it, one side is assets and the other side is liabilities and equity. So, whenever an investor put anything into the business it goes to the asset side and then on the other side it's added to his equity, the shares. Now, when a businessman invests let's say other than cash whatever he bring into the business even if he brought some of his own assets let's say into a business so assets will be debited again capital will be credited. So, that's why it always any transaction we are taking taking place in the business they effects both side of the balance sheet even profit and loss even income expense they all effect straight away through the balance sheet. Anyhow, we prepare this statement towards the end of the year but it is definite that anything you are adding or deducting from it balance the balance sheet. The transaction effect both side of the balance sheet. Now, the change of equity statement as you can see there is a share capital there is share premium there is a retained earnings and the reserves and the total. Now, starting from the opening balance because we need to give comparative to start from let's say 1st January 19 and then 19 income and the dividend paid and then we cover the balance at the end of the period of 19 and then currently we have the current income and we have the dividend paid and we have the fair value revaluation. So, wherever there is a change we need to make a change. Let me tell you another thing here that if a company buy its own shares from the market that is supposed to be deducted out of the share capital and from the total as well and on those shares we are not going to pay any dividends basically they are unissued shares later on we can sell them later on we can issue them but when you bought it that will be reflected in the statement of change in equity. Now, legal status and nature of business legal status here means that is it a public limited company or it is a private limited company or it is even sometime government departments government companies like as a like lasco and all that they are also now the basis of preparation that is also very important accounting convention we use to prepare these statements is historical cost historical cost means the day the cost incurred whenever the cost incurred at that time the you pay the money that will be recorded now later on there is a change so we follow some other standards but generally all these accounts are being prepared under the historical cost concept though we use estimates and judgments as well management is allowed to use judgment for example how much depreciation should be charged again not necessarily whatever amount we are charging is exactly amount reduction from the asset account no we just estimate maybe 10% maybe 20% for example building maybe 2% but so far motor vehicle maybe 25% so here we knew use our own judgment which which amount we are supposed to charge to the income statement summary of significant accounting policies as a now for the students I will recommend please you must have one published reports of any company maybe a textile maybe a cement company or maybe any type of company but you should have a complete report and you can see among those reports that after the balance sheet income statement cash flow statement change in equity statement you will come across notes to the account and among those notes to the account there is a list called significant accounting policy now significant not all but significant one which is very important for example you are borrowing money from the bank so balance sheet says loan from the bank but the notes will tell you exactly if the loan is borrowed what security is behind it what is the mark of rate on it how much balance in the balance in previous years and current year so all those details should be in the notes notes in the shape of notes now new revised standards if we are following because now it is also required some standard for example from 1918 2018 the new standards are being followed so we have to mention the detail your these accounts are being prepared under this this this these standards all those details are given property plan and equipment long term loans stock in trade share capital all notes are there and let me tell you about the share capital in the share capital we give the details that how many shares you have issued how much how much is the authorized capital how many have you issued and to whom you have issued a detail of shareholder pattern will be given but if some individual companies are buying your shares or let's insurance company have bought some shares banks have bought some shares so you have to mention them that how these shares are going to be allocated the detailed notes another thing you have to mention the capacity of your business as well how much you have the rated capacity that these many units you can produce now question is what exactly you produce so what is the percentage 90% 95% or maybe 100% but you need to mention that this is our rated capacity and this capacity we have achieved so they are all in this shape of notes thank you very much