|
Information > Financial Terms > This page Equities 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.
|