Equity includes the total value of the assets and property of the enterprise that it owns. They are used to form net assets, and are prepared in accordance with the legislation of the Russian Federation. Consider in more detail the main content of equity, analysis and its turnover. The features of its compilation are the same for both large and small companies.
Equity includes specific sources of financial resources that are different in terms of design principles, economic component and sources used:
- statutory;
- reserve;
- additional.
In addition, it may include:
- special purpose funds;
- undestributed profits;
- government subsidies;
- gratuitous receipts.
As noted, equity includes the authorized capital, the value of which is determined by the charter and other constituent documents of the organization. Therefore, its transformation is possible only after the corresponding changes to the constituent securities are introduced.
Additional capital includes the value of all property that is fixed by the founders in excess of the registered cost of capital. It is not always formed according to plan.
Equity also includes reserve capital, which is allocated by management from the company's profits and serves to cover possible losses and losses. Its size and the order of education is usually determined by applicable law and the charter.
Retained earnings are the main source of accumulation of company property. It consists of a part of the gross profit, which remained after taxes and expenses for other purposes.
Special-purpose funds include net profit, which is aimed at expanding and developing the enterprise, as well as social events.
Equity serves as a source of the formation of funds that are used by the organization to achieve its goals. Its composition includes two basic components:
- Invested capital, which is invested by the owners in the "common boiler". It includes the face value of preferred and common shares, as well as additional funds and donated values.
- The accumulated same is formed in addition to what has been advanced in advance by the owners. Usually its volume depends on how the turnover of equity goes. It includes those articles that are formed in the process of distribution of net profit. The source of his education is retained earnings. But here is the order of design, goals, capabilities and directions of application of each of the articles will differ significantly.
A very important issue is the analysis of equity, because the ability to generate income is its main characteristic. In whatever area it is directed, it is potentially always able to make a profit if it is used effectively. Therefore, the main goal of management is to maximize the well-being of owners. To evaluate the main projects, special analysis techniques are used.
The company's equity should be formed in accordance with the legislation of the Russian Federation. In addition, the foundation documents and accounting policies are basic.
Therefore, in accordance with the law, a company must create at least two funds:
But the areas of their use are exclusively the responsibility of the Board of Directors, which is able to identify priority, profitable business lines.