Capital & Reserves composes a movement bridge in the shape of a Statement of Changes in Equity: Opening, plus Share or Capital Introductions, minus Drawings, plus Retained Earnings for the year, equals Closing, printed as an actual reconciling bridge rather than a single net figure. An appropriation-flag check runs alongside it, testing whether dividends and transfers to reserve are what the books actually show, never assumed from a standard pattern. The working paper also carries an integrity tie: that the year's movement in the P&L account reconciles to the reported net profit for the year. When it doesn't tie, that's an honest FLAG, never silently forced to balance. The paper is framework-aware, presenting the bridge differently for a company, share capital and reserves under Schedule III, than for an LLP or partnership firm, partners' capital and current accounts. An earlier version of this check used to raise "unclassified equity, High" on any company that simply carries a normal accumulated profit and loss account balance; that false positive has been fixed in the current build.
Two paths to the same audit conclusion. One leaves traces; the other doesn't.
Opening equity, plus share or capital introductions during the year, minus drawings, plus retained earnings for the year, is composed and printed as an actual reconciling bridge to the closing balance, in Statement of Changes in Equity shape, so each component is visible rather than folded into one net movement figure.
Dividend declarations and transfers to reserve are tested against what the books actually record, not assumed from a standard pattern. Separately, the year's movement in the P&L account is checked against the reported net profit for the year; where the two don't tie, that mismatch is raised as an honest FLAG rather than forced to reconcile.
The bridge and its labels adapt to the entity type, share capital and reserves under Schedule III for a company, partners' capital and current accounts for an LLP or partnership firm, so the working paper reads correctly for the entity in front of it.
Opening + Introductions − Drawings + Retained Earnings = Closing is printed as a full reconciling bridge, matching the Statement of Changes in Equity shape, not compressed into a single net movement number.
Dividend and reserve-transfer appropriations are tested against what the books actually show for the year, rather than assumed to follow a standard pattern.
The year's movement in the P&L account is checked against the reported net profit for the year. When it doesn't reconcile, the working paper raises an honest FLAG rather than silently forcing the two to match.
The bridge presents differently depending on entity type, Schedule III share capital and reserves for a company, partners' capital and current accounts for an LLP or partnership firm.
