StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestStockholdersEquityMinorityInterestTotal equity is the owners' residual claim on a company's assets after all liabilities are subtracted: total assets minus total liabilities, excluding any temporary equity. It includes the equity of the parent company's shareholders, meaning preferred and common stock, additional paid-in capital, retained earnings, accumulated other comprehensive income, and treasury stock, plus noncontrolling interests in subsidiaries.
Total equity is also called shareholders' equity, stockholders' equity, or book value. It is an accounting measure, not the market value of the company.
Regulation S-X Rules 5-02.28 through 5-02.31 describe the equity captions a commercial company presents: non-redeemable preferred stock, common stock, other stockholders' equity (additional paid-in capital, retained earnings, and accumulated other comprehensive income), and noncontrolling interests. Under ASC 810, noncontrolling interest, formerly called minority interest, is reported within equity but separately from the parent's equity. In XBRL the grand total is tagged StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest, the parent's share is StockholdersEquity, and the noncontrolling portion is MinorityInterest. Redeemable preferred stock and other temporary equity sit between liabilities and equity and are not part of either total.
Which figure a ratio uses matters. Return on equity and book value per share are normally based on equity attributable to the parent, or on common equity, because net income attributable to the parent excludes the noncontrolling share. Leverage ratios from a whole-company view, such as debt to equity, often use equity including noncontrolling interests. Total equity can be negative when accumulated losses or buybacks exceed contributed capital, which several large, profitable companies report after years of repurchases.
Equity changes each period with net income, dividends, share issuance and buybacks, stock-based compensation, and other comprehensive income, all reconciled in the statement of stockholders' equity. Analysts track it as the cushion that protects creditors, as the denominator of return on equity, and against market capitalization in the price-to-book ratio.
A: Total assets minus total liabilities, with temporary equity excluded. It also equals the sum of the equity captions: stock, paid-in capital, retained earnings, other comprehensive income, treasury stock, and noncontrolling interests.
A: In the broad total, yes. Since SFAS 160, now ASC 810, noncontrolling interest is presented within equity. Equity attributable to the parent excludes it.
A: Liabilities exceed assets on the books. It can signal distress, but it can also result from large buybacks or dividends at a profitable company, so check the cause.
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