Ownership equity
From Freepedia
In finance and accounting, ownership equity, commonly known simply as equity, but also as risk capital or liable capital, is the difference in value between the assets and the claims on them (liabilities), which accrues to the owner(s). In case the owners are shareholders it is usually called shareholders' equity.
In a bankruptcy court, creditors have the first claim on assets and ownership equity is the last or residual claim against assets, paid only after all other creditors are paid.
For example in real estate, the owner's equity in a property is the difference between the market price of a property and the owner's mortgage debt.
Equity can be a source of assets, either through contributed capital (the contribution of capital resources i.e. assets from the owners) or retained earnings (when the business increases assets through earning activities.) These retained earnings can then be distributed to the owners (through equity draws, or dividends depending on the corporate structure) or kept in the business.
