Owner's Equity is the book value of a company equal to the recorded amounts of Assets minus the recorded amounts of Liabilities. The Owner’s Equity is simply the Owner’s share of the Assets of a business.
by
Mohamed Elbagoury , المدير العام , المركز العربي للتدريب و تكنولوجيا المعلومات
Owners’ Equity represents the residual claims on the assets by the owners of the company. If the assets were converted to cash and the liabilities paid off, everything left would go to the owners. There are two main types of equity: contributed capital and retained earnings. Contributed capital is what owners put into the company to become owners. Usually what the owners put into the company is cash, but it could be another asset, such as some equipment. If you buy some stock in Google, you become a part-owner of Google—although a very small one. The primary contributed capital account is Common Stock. The owners receive shares of stock as evidence of their partial ownership of the company. Retained Earnings represents all the income a company has generated from the day it started minus anything given back to the owners as dividends.
The capital employed in a company, computed by deducting the book value of the liabilities from the book value of the assets. Also called net assets, net worth, shareholders' equity, or shareholders' funds.
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