Equity is used in accounting in several ways. Often the word equity is used when referring to an ownership interest in a business. Examples include stockholders' equity or owner's equity.
Occasionally, equity is used to mean the combination of liabilities and owner's equity. For example, some restate the basic accounting equationAssets = Liabilities + Owner's Equity to become Assets = Equities.
Equity is also used to indicate an owner's interest in a personal asset. The owner of a $200,000 house that has an $80,000 mortgage loan is said to have $120,000 of equity in the house.
Outside of accounting, the word equity is also used to indicate fairness or justice.
