statement of changes in equity
The statement of changes in equity is the fuller version of the retained-earnings statement: it explains every way the owners' total stake moved during the period, not just retained profit. Think of it as a complete ledger of the owners' account — every deposit, every withdrawal, and every internal shuffle — laid out in one place.
Where the statement of retained earnings tracks only kept profit, this statement also tracks money owners put in (new shares issued), money returned to them (dividends and share buybacks, called treasury stock), and other equity items such as other comprehensive income. It is typically laid out as a grid: each column is a kind of equity (common stock, additional paid-in capital, retained earnings, treasury stock, and so on), and each row is an event during the year. The grand total ties to the equity figure on the balance sheet.
Larger corporations and those reporting under IFRS use this broader statement because their equity is more complicated than a sole proprietor's. A simple business may only need the short retained-earnings statement; a company that issues stock, buys some back, and records comprehensive income needs the full grid to show owners exactly what happened to their stake. The key idea is that profit is only one of several forces that change equity.
A grid shows beginning equity of $200,000, then adds $30,000 of new shares issued and $12,000 of net income, and subtracts $2,000 of dividends and $5,000 of treasury stock bought back — ending equity $235,000.
Profit is just one row; share issues, dividends, and buybacks also move equity.
For a small business this collapses into the simpler statement of retained earnings; the two are not separate worlds, just different levels of detail.