Statement of Changes in Owners Equity Template has a column called “Share Premium”. As the name suggests it relates to shares and hence share capital. Partly for this reason they are also shown next to each other in Statement of Changes in Equity Template. The questions you may be asking are “what is this premium?” and “how is it calculated?” How this is shown on the statement of changes in owners equity is shown in our template.
Basically what a share premium represents is a difference between the nominal value of the share and the amount that the company actually received for this newly issued share. As this difference is raised from shareholders in return for ownership of the company, it’s certainly of the same nature as share capital and hence is shown on the balance sheet as part of the shareholders’ funds. This fund is called share premium. It can also be considered as an additionally paid-in capital.
Share premium increases and decreases the same way as share capital. If additional shares are issued and the value for each share is over the nominal, the company books into its accounts share premium. Calculating the premium is rather simplistic. You multiply the numbers of share with the difference between a nominal value per share and actually paid amount per share and as a result you get share premium. In case of share capital decrease, the share premium may also be decreased. Note that this may be subject to local tax legislation effects so preliminary consultation is strongly recommended.
The changes in share premium are presented in Statement of Changes in Owners Equity Template under IFRS reporting in section “Transactions with owners” and this is added as a total sum to the brought forward balance of share premium. Additional information is presented in the notes to the annual report.