Practice Activity 4.4 Components of equity

Equity is the amount that is left after deducting liabilities from assets. What are the components of equity?

Suggested answers to practice activity 4.4

The following comprise equity:

i. Each class of contributed equity (preference share capital, ordinary share capital, deferred share capital);

ii.Accumulated balance of each category of other comprehensive income (for example, share premium); and

iii.Retained earnings.