Equity
This term refers to the law of the country selected below.
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What is equity?
Equity is a balance-sheet category corresponding, as a rule, to an entity’s net assets, i.e. assets less liabilities and provisions for liabilities. It includes not only contributions made by owners but also, among other things, capital created from profits and the entity’s financial results. If liabilities and provisions for liabilities exceed the value of assets, equity may become negative.
How is equity presented in the balance sheet?
The presentation of equity depends on the type of entity and the financial-statement format applied. In capital companies preparing a balance sheet under Appendix 1 to the Polish Accounting Act, equity includes, among other items, basic capital (share capital or, in a simple joint-stock company, kapitał akcyjny), supplementary capital, revaluation reserve, other reserve capitals, retained profit or loss and the net profit or loss for the current financial year, together with the relevant negative items required by the Act.
Legal basis: in particular Articles 36 and 46 of the Polish Accounting Act and Appendix 1 thereto.
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