Equity is the owner’s value in an asset or group of assets.In accounting, equity is usually defined as the value of the assets contributed by the owners. This is added to the total income earned and retained by the company to give the company's total equity value. This description of equity is correct but very simplistic. A more profound description is really that used by the homeowner, that is, equity is the owner’s value in an asset or group of assets.As an example, a company with total assets valued at $1,000, may have debt (liabilities) valued at $900, in which case the owner’s value in the assets is $100, representing the company’s equity.
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