legal and economic claims to the assets of an accounting entity.
The concept of equities can be expressed in the accounting equation:
equities include liabilities (debts payable to outsiders) and capital
(claims of owners).
equity (capital) consists of three major accounts:
capital stock, surplus, and retained earnings (or undivided profits).
The surplus account contains elements of additional paid-in capital
and retained earnings. The
definitions of capital for regulatory purposes differ from those under
generally accepted accounting principles.
Regulatory authorities have established guidelines for determining