3 ms·
Think of it this way: Assets - Liabilities = Equity If we deduct everything that we owe (Liabilities) from everything that we own (Assets), whatever is left be
by soheilpro 6y ago
Think of it this way: Assets - Liabilities = Equity
If we deduct everything that we owe (Liabilities) from everything that we own (Assets), whatever is left belongs to the shareholders (Equity).
- sago 6y agoExcept in your case you need all the rules about income and expenses. And loads of grey cases get weird (it is possible to have assets or liability of the wrong sign), and require serious accountancy expertise to know all the rules to get them back to the signs that you expect. Or you can use negative numbers and everything just works. Your financial software _will_ use my approach. As do the most sophisticated software of the most complicated companies. But their presentation gets mangled through a complicated series of rules for archaic reasons.