Australia Duality Concept

[DreamerROC]

Hello,

I have a textbook which says that the duality concept states that total equities = total assets. They differentiate between Owner's equity and Equity. I have not seen Equity being used to represent Assets unless it is representing Net Assets. I would like to know your thoughts and opinions as I have not found a definition of equity online which agrees to their definition.

Regards,

Teacher S

 

[Yash]

Assets = Equity + Liabilities. Also if you want to represent Equity for an asset, one can use the word 'Equity holder' which means the owner of the business and its net assets, does this help

 

[DreamerROC]

Assets = Equity + Liabilities. Also if you want to represent Equity for an asset, one can use the word 'Equity holder' which means the owner of the business and its net assets, does this help

It helps by confirming that I am correct, so thank you. I would still like to know if anyone agrees with this textbook. Especially, those from Australia. This book has Assets = Owners Equity + Liabilities

 

[Yash]

Hi Owners equity for limited co's. Shareholders Equity for public ltd co's. Both mean the same. Nowadays no one writes just equity in SOFP. New IFRS standards. If you look at any company financial statements, you will easily understand.

 

[DreamerROC]

Hi Owners equity for limited co's. Shareholders Equity for public ltd co's. Both mean the same. Nowadays no one writes just equity in SOFP. New IFRS standards. If you look at any company financial statements, you will easily understand.

I agree that both mean the same but that is not my issue. My issue is how this textbook equates total equities to total assets and how it uses the equation Assets = Owners Equity ＋ Liabilities. Therefore, it differentiates between equity and owner's equity. It is an australian book so I am interested in a reply from australians or anyone else who has come across this before.

 

[DreamerROC]

The real definition of Equity= Assets - Liabilities. The term equity or owners equity could be used as by a person who like to use his own financial vocabulary. For example, in the above reply I told Owners equity for Limited company because I meant only Owner holds the stake and the company is liable to payback. To be precise about this http://www.accounting-basics-for-students.com/owners-equity-example.html. By the way sorry you can use Equity or Shareholders equity interchangeably while reporting

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Whether it is equity or owners equity, we are both saying that it equals to net assets. Unlike the textbook which states that equity = assets ＋ liabilities and owners equity = assets - liabilities. That is why I would like to see what other people have to say about it..

 

[Yash]

Whether it is equity or owners equity, we are both saying that it equals to net assets. Unlike the textbook which states that equity = assets ＋ liabilities and owners equity = assets - liabilities. That is why I would like to see what other people have to say about it..

Don't worry, even my workbooks have lots of errors. Equity= Assets - Libilities
https://en.wikipedia.org/wiki/International_Financial_Reporting_Standards

Change the workbook or text book. Sometimes even the numbers printed could be wrong and doesn't make sense.

 

[DreamerROC]

Correction:the textbook states that total equity=owners equity+liabilities and not total equity = assets + liabilities as mentioned in my previous post. I can't change it as the people in charge have replied to me saying it is correct.