Equity is a residual value of assets which the owner has claim to after satisfying other claims on the assets (liabilities). There are five potential components that comprise the owner's equity section of the balance sheet:
It decreases stockholder's equity and total shares outstanding.
Statement of Changes in Shareholders' Equity
This statement reflects information about increases or decreases to a company's net assets or wealth. It reveals much more about the year's stockholders' equity transactions than the statement of retained earnings.
|Creg: Why did the equity change?|
|rethan: What does "with the remaining amount invested contained in additional paid in capital" mean?|
|benji1983: Rethan, if $1,500 were paid for 1,000 stocks with par value of $1.00 per stock, then $1,000 ($1.00 x 1,000) will be recorded as Contributed Capital. The remaining $500 ($1,500 - $1,000) will be recorded as Additional Paid-in Capital.|
|Oarona: You got it right benji1983|
|jpducros: What about appropriated earnings ?|
| omya: Equity means: Contributed Capital + Retained Earnings - Treasury Stock (buyback shares) + comprehensive income.|
Comprehensive Income includes effect of foreign exchange rate changes.
| oneashok: whether Paid in Capital will also contribute to Equity??|
And does par value denote the face value of the stock?
| SeanReam: Par value for stock is usually $1.00, regardless of stock price, this helps show the amount of shares outstanding. If the 1 million shares of stock were sold to the public in one batch at a market value of $45 dollars, it would appear as such|
Common Stock ($1 Par Value) 1,000,000
Additional Paid in capital 44,000,000