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In finance, equity is an ownership interest in property that may be offset by debts or other liabilities. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets owned. For example, if someone owns a car worth $24,000 and owes $10,000 on the loan used to buy the car, the difference of $14,000 is equity. Equity can apply to a single asset, such as a car or house, or to an entire business. A business that needs to start up or expand its operations can sell its equity in order to raise cash that does not have to be repaid on a set schedule.[1]

When liabilities attached to an asset exceed its value, the difference is called a deficit and the asset is informally said to be "underwater" or "upside-down". In government finance or other non-profit settings, equity is known as "net position" or "net assets".

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The equity of an asset can be used to secure additional liabilities. Common examples include home equity loans and home equity lines of credit. These increase the total liabilities attached to the asset and decrease the owner's equity.

A business entity has a more complicated debt structure than a single asset. While some liabilities may be secured by specific assets of the business, others may be guaranteed by the assets of the entire business. If the business becomes bankrupt, it can be required to raise money by selling assets. Yet the equity of the business, like the equity of an asset, approximately measures the amount of the assets that belongs to the owners of the business.

Financial accounting defines the equity of a business as the net balance of its assets reduced by its liabilities. For a business as a whole, this value is sometimes referred to as total equity,[3] to distinguish it from the equity of a single asset. The fundamental accounting equation requires that the total of liabilities and equity is equal to the total of all assets at the close of each accounting period. To satisfy this requirement, all events that affect total assets and total liabilities unequally must eventually be reported as changes in equity. Businesses summarize their equity in a financial statement known as the balance sheet (or statement of net position) which shows the total assets, the specific equity balances, and the total liabilities and equity (or deficit).

Various types of equity can appear on a balance sheet, depending on the form and purpose of the business entity. Preferred stock, share capital (or capital stock) and capital surplus (or additional paid-in capital) reflect original contributions to the business from its investors or organizers. Treasury stock appears as a contra-equity balance (an offset to equity) that reflects the amount that the business has paid to repurchase stock from shareholders. Retained earnings (or accumulated deficit) is the running total of the business's net income and losses, excluding any dividends. In the United Kingdom and other countries that use its accounting methods, equity includes various reserve accounts that are used for particular reconciliations of the balance sheet.

Another financial statement, the statement of changes in equity, details the changes in these equity accounts from one accounting period to the next. Several events can produce changes in a firm's equity.

Investors in a newly established firm must contribute an initial amount of capital to it so that it can begin to transact business. This contributed amount represents the investors' equity interest in the firm. In return, they receive shares of the company's stock. Under the model of a private limited company, the firm may keep contributed capital as long as it remains in business. If it liquidates, whether through a decision of the owners or through a bankruptcy process, the owners have a residual claim on the firm's eventual equity. If the equity is negative (a deficit) then the unpaid creditors take a loss and the owners' claim is void. Under limited liability, owners are not required to pay the firm's debts themselves so long as the firm's books are in order and it has not involved the owners in fraud.

When the owners of a firm are shareholders, their interest is called shareholders' equity. It is the difference between a company's assets and liabilities, and can be negative.[4] If all shareholders are in one class, they share equally in ownership equity from all perspectives. It is not uncommon for companies to issue more than one class of stock, with each class having its own liquidation priority or voting rights. This complicates analysis for both stock valuation and accounting.

A company's shareholder equity balance does not determine the price at which investors can sell its stock. Other relevant factors include the prospects and risks of its business, its access to necessary credit, and the difficulty of locating a buyer. According to the theory of intrinsic value, it is profitable to buy stock in a company when it is priced below the present value of the portion of its equity and future earnings that are payable to stockholders. Advocates of this method have included Benjamin Graham, Philip Fisher and Warren Buffett. An equity investment will never have a negative market value (i.e. become a liability) even if the firm has a shareholder deficit, because the deficit is not the owners' responsibility.

Equity usually appears in courts of law as a term related to justice or proportional fairness, or in financial offices to property or one's share of a company. The derivative root of the noun, which gained stability in the English language during the 1300s, is Latin aequus, meaning "even," "fair," or "equal"; however, to be fair, it was introduced to English by the French, whose adaptation of the Latin was equit. The French word has clear legal connotations; it means "justice" or "rightness," and those meanings, plus a splash of "fairness," carried over to the English word equity. Noah Webster, himself a lawyer, notes the legal term equity of redemption in his 1828 dictionary defining it as "the advantage, allowed to a mortgager, of a reasonable time to redeem lands mortgaged, when the estate is of greater value than the sum for which it was mortgaged." This use led to the modern financial meanings of equity: "the value of a piece of property after any debts that remain to be paid are subtracted" and "a share in a company or of a company's stock."

Equity is equal to total assets minus its total liabilities. These figures can all be found on a company's balance sheet for a company. For a homeowner, equity would be the value of the home less any outstanding mortgage debt or liens.

On January 20, 2021, President Joseph R. Biden, Jr. released Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, requiring that agencies assess equity with respect to race, ethnicity, religion, income, geography, gender identity, sexual orientation and disability.

The importance of equity in emergency management is not a new concept. We know that historically underserved communities experience differences in preparedness and mitigation measures as well as how quickly their communities can resume social and economic life after a disaster. FEMA will continue to integrate equity as a foundation of our culture through transformational change within our workforce, across our programs, and throughout the emergency management community. The agency will also direct resources and routinely evaluate our programs and policies to help reduce barriers to access and to achieve equitable outcomes that benefit all communities.

Become part of a transformative program that reshapes the landscape of graduate medical education (GME). The ACGME Equity Matters program supports the GME community in developing innovative resources that increase workforce diversity, encourage adoption of equity practices, and foster inclusive learning environments.

USDA's Equity Commission is an independent body with 41 Commission and Subcommittee members charged with evaluating USDA programs and services and developing recommendations on how we can reduce barriers. Using this information, USDA will make needed changes so that the Department's programs, services, and decisions reflect the values of equity and inclusion. This will ensure everyone has a fair shot at resources, begin closing the racial wealth gap, and address longstanding inequities in agriculture. In October 2023, the body finalized its work by voting on a total of 66 recommendations that will be included in the Final Report to be published in 2024.

The inaugural meeting of the Equity Commission (EC or Commission) and its Agriculture Subcommittee was held virtually on February 28, 2022. Members of the public who registered by February 21st had the opportunity to sign up to provide oral comments during the meeting. Members of the public were also invited to submit written comments in their registration form and via email to equitycommission@usda.gov. The public comment period was open until March 15, 2022. All meeting materials, including public comments, are posted below.

Incorporating equity and inclusive economic development [1] into the CEDS strengthens the quality of the process and the integrity of the document and makes regions more economically competitive. Equity, from an economic development planning perspective, is not a plug and play tool or checklist, but rather a set of strategies and targeted approaches to serve populations that may have been underserved by traditional methods to economic development. In the past, some economic development policies have failed to provide economic opportunities equally across all communities exacerbating economic exclusion, with particular discrimination by race, gender, socio-economic status and geography, resulting in geographic inequalities and impeding growth. Regions are now recognizing these impacts and are steadily equipping themselves with the knowledge and resources to take action. e24fc04721