Final answer:
Profit on disposal of properties is recognized in a company's income statement and affects the company's statement of changes in equity through the retained earnings. The statement of changes in equity reflects how equity has changed over a period due to various transactions.
Step-by-step explanation:
The query about profit on disposal of properties in the company's statement of changes in equity is a concept related to financial accounting in business. When a company disposes of properties at a price higher than their book value, it does report a profit. However, this profit on disposal is typically recognized in the company's income statement, and the effects of this transaction subsequently flow through to the statement of changes in equity via the retained earnings after the end of the fiscal period.
The statement of changes in equity is a financial statement that shows how the equity of the company has changed over a specified period due to various factors including profits, losses, contributions from and distributions to shareholders.