Difference between revisions of "Equity"
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== Definition == | == Definition == | ||
| − | '''Equity'''. In accounting, it is ownership interest or claim of a holder of common stock (ordinary shares) and some types of preferred stock(preference shares) of a company. | + | '''Equity'''. In accounting, it is ownership interest or claim of a holder of common stock (ordinary shares) and some types of preferred stock(preference shares) of a company. An investor’s ownership in a company or project. |
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| + | There are various types of equity, but equity typically refers to [[Shareholder Equity]], which represents the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debt were paid off. | ||
On a balance sheet, equity represents funds contributed by the owners (shareholders) plus retained earnings or minus the accumulated losses. It can also be the net worth of a person or organization computed by subtracting total liabilities from the total assets. In the case of cooperatives, equity represents members' investment plus retained earnings, minus losses. | On a balance sheet, equity represents funds contributed by the owners (shareholders) plus retained earnings or minus the accumulated losses. It can also be the net worth of a person or organization computed by subtracting total liabilities from the total assets. In the case of cooperatives, equity represents members' investment plus retained earnings, minus losses. | ||
Revision as of 15:23, 22 March 2021
Definition
Equity. In accounting, it is ownership interest or claim of a holder of common stock (ordinary shares) and some types of preferred stock(preference shares) of a company. An investor’s ownership in a company or project.
There are various types of equity, but equity typically refers to Shareholder Equity, which represents the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debt were paid off.
On a balance sheet, equity represents funds contributed by the owners (shareholders) plus retained earnings or minus the accumulated losses. It can also be the net worth of a person or organization computed by subtracting total liabilities from the total assets. In the case of cooperatives, equity represents members' investment plus retained earnings, minus losses.
In market valuation terms it denotes the excess of asset value over liabilities.
Synonyms
- Net Worth
Disclaimer
This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.
