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The form of corporate equity ownership, a type of security. It is recorded at par value on the balance sheet, and any amount paid over par is listed as additional paid-in capital.

A class of ownership in a corporation with a fixed dividend, having priority over common stock in the distribution of dividends and assets. It is recorded at the purchase price on the balance sheet.

The cumulative amount of net income that a company has not distributed to its shareholders as dividends but retained for reinvestment in the business. It is recorded in the shareholder's equity section of the balance sheet.

Shares that were issued and subsequently reacquired by the issuing company. It is recorded as a contra equity account, reducing the total equity of the company.

The residual interest in the assets of the entity after deducting liabilities. In accounting, equity is the difference between the assets and liabilities of a company.

The value of share capital above its stated par value, from issuing shares at a price higher than par. It is recorded in the equity section of the balance sheet under shareholder's equity.

A distribution of a portion of a company's earnings to its shareholders. Dividends are recorded as a reduction in retained earnings.

An increase in the number of shares of a company's stock without changing the shareholders' equity. A stock split is usually done to decrease the market price of individual shares. The total market value of the shares remains the same.

Raising capital through the sale of shares in a company. Equity financing is recorded by increasing cash or assets and increasing equity through the issuance of stock.

Represents the portion of a subsidiary corporation's stock not owned by the parent corporation. Minority interest is recorded in the consolidated balance sheet under equity but separate from the parent company's equity.

A component of shareholders' equity consisting of items that are not included in the calculation of net income, such as unrealized gains and losses on investments and foreign currency translations. It is recorded directly in the equity section of the balance sheet.

Financial instruments like bonds or preferred shares that can be converted into a predetermined number of common shares. Convertible securities are recorded as debt (bonds) or equity (preferred shares) until converted, after which they become common stock.

An accounting technique used to record investments in associated companies, where the investing company has significant influence, typically between 20% and 50% of voting shares. The investment is initially recorded at cost and then adjusted for the investor's share of the investee's profits or losses.

Contracts that give employees or other recipients the option to purchase company stock at a later date at a predetermined price. Accounting for stock options can be complex, often involving an estimate of their fair value and recording it as expense over the vesting period.

The excess amount paid by investors above the par value of a stock during an initial public offering (IPO) or other equity issuance. It is recorded as part of shareholder's equity, separate from paid-in capital.

The ratio of equity available to common shareholders divided by the number of outstanding shares. It is calculated as:

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested. The ROE is calculated as:

A partial divestiture of a business unit where the parent company sells minority interest of a subsidiary to outside investors. The transaction is accounted for by reducing the equity of the parent by the proportion of the unit sold.

Derivatives that provide the holder the right to purchase a company’s stock at a specific price until the expiration date. Warrants are recorded within equity, similar to how stock options are accounted for.