The statement of changes in equity records changes in owners’ investments in a company over time. The main components are paid-in capital and retained earnings. Paid-in capital is the amount raised from issuing new shares. Retained earnings are any income earned by the company that is reinvested in the business. The cumulative total of other comprehensive income are also recorded on this statement.
For each component of shareholders’ equity, the statement records the beginning balance, any additions or reductions, and the ending balance. Apple’s 2020 statement of shareholders’ equity is presented below.
In 2020, Apple’s common stock and additional paid-in capital increased, primarily due to share-based compensation to employees. Retained earnings declined, as the company earned $57 billion but paid $14 billion in dividends and $73 billion to repurchase shares. Other comprehensive income represents the items included on the statement of comprehensive income.