4252018 Equity — AccountingTools
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Equity
December 30, 2017
Equity is the net amount of funds invested in a business by its owners, plus any
retained earnings. It is also calculated as the difference between the total of all
recorded assets and liabilities on an entity's balance sheet.
The equity concept also refers to the different types of securities available that can
provide an ownership interest in a corporation. In this context, equity refers to
common stock and preferred stock.
For an individual, equity refers to the ownership interest in an asset. For example,
a person owns a home with a market value of $500,000 and owes $200,000 on the
related mortgage, leaving $300,000 of equity in the home.
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Equity
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