Statement of Changes in Equity Excludes Income Statement Items

Steps:

• Recall that the statement of changes in equity reconciles opening and closing equity balances, showing transactions with owners and other equity movements.
• Identify components: includes share issues, dividends, reserves transfers, but not profit calculation itself.
• Evaluate options: A, B, D directly alter equity structure; C is an income measure.
• Confirm: Profit flows to retained earnings via comprehensive income, not listed separately here.

Why C is correct:

• Profit from operations is reported in the income statement and affects retained earnings indirectly, per IAS 1, which separates income recognition from equity change presentation.

Why the others are wrong:

• A: Bonus issue reclassifies reserves to share capital, directly impacting equity components.
• B: Dividends paid reduce retained earnings, a key equity outflow.
• D: Transfer to general reserve moves amounts within equity, shown as an internal adjustment.

Final answer: C