There are, at least, two ways to discuss equity:
- Equity is the residual interest in the assets of the entity after deducting all its liabilities, or
- An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
- For the purposes of IFRS 3, equityinterests is used broadly to mean ownership interests of investor-owned entities and owner, member or participant interests of mutual entities.
- The equity method is a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets. The investor’s profit or loss includes its share of the investee’s profit or loss and the investor’s other comprehensive income includes its share of the investee’s other comprehensive income.
- An equity-settled share-based payment transaction is a share-based payment transaction in which the entity:
- receives goods or services as consideration for its own equity instruments (including shares or share options), or
- receives goods or services but has no obligation to settle the transaction with the supplier.
1. Equity the residual interest in the assets of the entity after deducting all its liabilities
1. Statement of Financial Position
Equity and liabilities
1. Non-current assets
2. Current assets
A – TOTAL ASSETS [1 + 2] = B
3. Non-current liabilities (including Provisions)
4. Current liabilities (including Provisions)
5. Equity [1 + 2 -/- 3 -/- 4]
B – TOTAL EQUITY AND LIABILITIES [3 + 4 + 5] = A