FAR Equity · Updated November 2026
How Do You Build a Statement of Stockholders' Equity?
Roll each equity account separately instead of trying to calculate total equity in one step.
Common stock and APIC
These can change through share issuances, equity compensation, and other capital transactions.
Retained earnings
Beginning retained earnings + net income − dividends ± applicable adjustments = ending retained earnings.
Treasury stock
Repurchases generally reduce equity, with reissuance effects depending on the accounting method and applicable APIC balances.
AOCI
Current-period OCI changes the accumulated OCI balance.
Exam strategy
Build separate columns for common stock, APIC, retained earnings, treasury stock, and AOCI.
The takeaway
Roll each component separately, then total the equity.
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FAQ
Does net income increase retained earnings?
Generally yes.
Does treasury stock increase assets?
No.
Does OCI enter retained earnings directly?
Not generally when reported in AOCI.