Hi, could you help me with the accounting term "general Reserve" please?
" transfer from retained earnings to general reserve"
Why it's not included in the statement of change in equity?
Thanks a lot

Transfers from retained earnings is called appropriation of profits. There may be many reasons. Usually an appropriation is recorded to ensure that the profits are not just distributed amongst the shareholders.

The reserves can be:
a. specific - dividend equalization reserve, plant replacement reserve
b. general - the amounts are set aside so that when the future profits are low, the company can utilize the reserves for distribution of profits.
c. legal - revaluation reserve, capital redemption reserve

Please understand that all reserves are part of the shareholders' equity. They must be included in the Statement of Changes in Equity