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Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

The legal and economic claims to the assets of an accounting entity.  The concept of equities can be expressed in the accounting equation:

Assets  =  Equities

Where equities include liabilities (debts payable to outsiders) and capital (claims of owners).

Bank equity (capital) consists of three major accounts:  capital stock, surplus, and retained earnings (or undivided profits).  The surplus account contains elements of additional paid-in capital and retained earnings.  The definitions of capital for regulatory purposes differ from those under generally accepted accounting principles.  Regulatory authorities have established guidelines for determining CAPITAL ADEQUACY.

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