Equity Attributable to Owners of the Parent
Equity Attributable to Owners of the Parent refers to the portion of equity in the consolidated financial statements that is attributable to the shareholders of the parent company. It excludes the portion of equity attributable to non-controlling interests.
Definition: Equity attributable to the parent company refers to the portion of equity in consolidated financial statements that belongs to the shareholders of the parent company. It includes all the equity of the parent company's shareholders in the enterprise, excluding the portion of minority shareholders' equity.
Origin: The concept of equity attributable to the parent company originated from the need to prepare consolidated financial statements. As corporate groups and multinational operations became more common, consolidated financial statements became an important tool for reflecting the overall financial status of a company. To accurately reflect the equity of the parent company's shareholders, the concept of equity attributable to the parent company was introduced in financial statements.
Categories and Characteristics: Equity attributable to the parent company mainly includes the following categories:
- Paid-in Capital: The actual capital invested by the parent company's shareholders.
- Capital Surplus: The portion of capital invested by the parent company's shareholders that exceeds the par value.
- Surplus Reserves: Reserves extracted from the net profit of the enterprise.
- Undistributed Profits: The accumulated profits of the enterprise that have not been distributed to shareholders.
Specific Cases:
- Case 1: A corporate group A shows equity attributable to the parent company of 50 million yuan in its consolidated financial statements. This means that the total equity of the parent company's shareholders in the entire corporate group is 50 million yuan, excluding the portion of minority shareholders' equity.
- Case 2: Corporate group B finds that its equity attributable to the parent company has increased by 10 million yuan compared to the previous year during its annual financial report. This may be due to new investments from the parent company's shareholders or increased profits of the enterprise.
Common Questions:
- What is the difference between equity attributable to the parent company and minority shareholders' equity? Equity attributable to the parent company refers to the equity of the parent company's shareholders in the enterprise, while minority shareholders' equity refers to the equity of non-parent company shareholders in the enterprise.
- Why does equity attributable to the parent company change? Equity attributable to the parent company can change due to new investments from the parent company's shareholders, enterprise profits or losses, dividend distributions, and other factors.
