We will first quickly run through the concept of equity –

Equity is the capital raised by a company for the purpose of purchase of assets or for making an investment in a specific project or for the smooth functioning of operations. It’s important as it represents the value of an investor’s stake in a company.

It can also be aid that its the sum of money that the company is required to pay at the time of its liquidation to its shareholders after realising all of its assets and paying off all of its debts. Equity is presented in the financial statement as a component of a Balance Sheet.

The formula for calculating the company’s equity –

Shareholder’s Equity = Total Assets – Total Liabilities

Inclusive list of items under the head” Equity”

It is generally presented under two subheads – Equity and Other Equity.

The extract shown below indicates the position of Equity in a Balance Sheet –

I hope this answers your question.

Aastha