Equity

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.

• 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 the Statement of Changes in Equity this member stands for the residual interest in the assets of the entity after deducting all its liabilities. It also represents the standard value for the 'Components of equity' axis if no other member is used.

In market valuation terms it denotes the excess of asset value over Liabilities.

Variations

There are various types of equity, but equity typically refers to Shareholders 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.

Synonyms

• Net Worth

See Also

• Claim

Usage

• Statement of Financial Position
• Statement of Changes in Equity

XBRL Properties

• IFRS Prefix: ifrs-smes
• Element Name: Equity [member]
• Common Initials:
• Element Type and Attributes: member[default]
• Hierarchy Level: 3
• IFRS References:

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.