Shareholder equity - Definition

In business and accounting, the shareholders' equity refers to the amount of assets that are owned by a company's shareholders.

Contents

Accounting

The shareholder's equity can be calculated as the value of a company's assets less the value of its liabilities. Shareholders' equity appears on the liability side of a company's balance sheet.

Accounts

Accounts listed under shareholders' equity include (example ([1] (http://finance.yahoo.com/q/bs?s=C&annual))):

Stock options
Stock capital (share capital) (can include redeemable preferred stock, preferred stock, common stock)
Retained earnings
Treasury stock
Capital surplus (stock capital, share capital, paid in capital)

Financing

Equity financing is the method by which a company raises money by selling shares, for example through an IPO.