Statement of Changes in Net Equity DMPL – 30095

Statement of Changes in Net Equity (DMPL)

The preparation of the Statement of Changes in Net Equity (DMPL) is optional and, according to article 186, paragraph 2, of the Corporations Act, the Statement of Retained Earnings or Accumulated Losses (DLPA) may be included in this statement. DMPL is a more complete and comprehensive statement since it shows the changes in all the net equity accounts during the fiscal year, including the formation and use of reserves not derived from earnings.

CHANGES IN EQUITY ACCOUNTS

The accounts that make up the Net Equity can suffer variations for a number of reasons, such as:

1. Items that affect the total equity:
   1. increase by net profit or reduction by net loss for the year;
   2. reduction by dividends;
   3. increase by revaluation of assets (when the result is credit);
   4. increase by donations and investment grants received;
   5. increase by subscription and payment of capital;
   6. an increase for receiving an amount that exceeds the par value of the paid-in shares or the issue price of shares without par value;
   7. increase by the value of the alienation of beneficiary parts and subscription bonus;
   8. increase for premium received in the issue of debentures;
   9. reduction by own shares acquired or increase by their sale;
   10. increase or reduction due to prior year adjustments.
        
2. Items that do not affect total equity:
   1.  capital increase using earnings and reserves;
   2. appropriations of net income for the year by reducing the Retained Earnings account for reserve formation, such as Legal Reserve, Unrealized Income Reserve, Contingency Reserve, and others;
   3. reversions of equity reserves to the retained earnings or accumulated losses account;
   4. compensation of Losses with Reserves.

PROCEDURES TO FOLLOW

The preparation of the Statement of Changes in Net Equity is relatively simple since it is enough to represent, in a summarized and coordinated way, the transactions during the fiscal year in the various Net Equity accounts, that is, Capital, Capital Reserves, Surplus Reserves, Revaluation Reserves, Treasury Shares, and Retained Earnings or Accumulated Losses.

A column is used for each of the company's equity accounts, including a total account, which represents the sum of the balances or transactions of all the individual accounts. These transactions must be extracted from the general ledger sheets of these accounts.

The transactions and their values are transcribed in the respective columns but in a coordinated way.

For example, if we have a capital increase with profits and reserves, in the row corresponding to this transaction, we transcribe the increase in the capital column by the amount of the increase, and, in the same row, the reductions in the reserves and profit accounts used in the capital increase by the corresponding amounts.

TEMPLATE

Technically, the preparation of the DMPL is quite simple, and its components in a vertical row are the same as those of the DLPA. In the horizontal row, the table will show the components of the net equity.