Equity
<p >In <a href="https://en.wikipedia.org/wiki/Accountancy" class="mw-redirect" title="Accountancy" >accounting</a> and <a href="https://en.wikipedia.org/wiki/Finance" title="Finance" >finance</a>, <b>equity</b> is the difference between the value of the <a href="https://en.wikipedia.org/wiki/Asset" title="Asset" >assets</a> and the cost of the <a href="https://en.wikipedia.org/wiki/Liability_(financial_accounting)" title="Liability (financial accounting)" >liabilities</a> of something owned. For example, if someone owns a car worth $15,000 but owes $5,000 on a loan against that car, the car represents $10,000 equity. Equity can be <a href="https://en.wikipedia.org/wiki/Negative_equity" title="Negative equity" >negative</a> if liability exceeds assets.
In an accounting context, <b>shareholders' equity</b> (or stockholders' equity, shareholders' funds, shareholders' capital or similar terms) represents the equity of a company as divided among <a href="https://en.wikipedia.org/wiki/Shareholder" title="Shareholder" >shareholders</a> of <a href="https://en.wikipedia.org/wiki/Common_stock" title="Common stock" >common</a> or <a href="https://en.wikipedia.org/wiki/Preferred_stock" title="Preferred stock" >preferred stock</a>. Negative shareholders' equity is often referred to as a shareholders' deficit.
For purposes of <a href="https://en.wikipedia.org/wiki/Liquidation" title="Liquidation" >liquidation</a> during <a href="https://en.wikipedia.org/wiki/Bankruptcy" title="Bankruptcy" >bankruptcy</a>, <b>ownership equity</b> is the equity which remains after all liabilities have been paid.</p>