owners’ equity

accounting

Also known as: equity, equity capital, shareholders’ equity

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July 1, 2026

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In accounting, the accounting equation is a fundamental principle that states assets minus liabilities equals owners' equity. Owners' equity represents the portion of a company's assets that are owned by its shareholders. This equity increases as the company's assets grow or its liabilities decrease. For example, in homeownership, equity is the part of the home's value that the owner truly possesses, which grows as mortgage payments are made and the property value increases.12

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bank
The role of bank capital
…also comes from share owners’ equity, which means that bank managers must concern themselves with the value of the bank’s equity capital as well as the composition of the bank’s assets and liabilities. A bank’s shareholders, however, are residual claimants, meaning that they may share in the bank’s profits but…
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…also comes from share owners’ equity, which means that bank managers must concern themselves with the value of the bank’s equity capital as well as the composition of the bank’s assets and liabilities. A bank’s shareholders, however, are residual claimants, meaning that they may share in the bank’s profits but…
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commercial transaction
Sale of goods
…in legal parlance, transfer of ownership to the buyer. One may say that the transfer of ownership for a price is the essence of a sale.
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…in legal parlance, transfer of ownership to the buyer. One may say that the transfer of ownership for a price is the essence of a sale.
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corporate finance
, owners’ equity) and liability. Examples of equity are proceeds from the sale of stock, returns from investments, and retained earnings. Liabilities include bank loans or other debt, accounts payable, product warranties, and other types of commitments from which an entity derives value.
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, owners’ equity) and liability. Examples of equity are proceeds from the sale of stock, returns from investments, and retained earnings. Liabilities include bank loans or other debt, accounts payable, product warranties, and other types of commitments from which an entity derives value.
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accounting
The balance sheet
…benefits; and (3) the owners’ equity, calculated as the residual interest in the assets of an entity after deducting liabilities.
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…benefits; and (3) the owners’ equity, calculated as the residual interest in the assets of an entity after deducting liabilities.
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