Capital: Difference between revisions
imported>Doug Williamson (Add link.) |
imported>Doug Williamson (Expand for regulatory capital.) |
||
| Line 3: | Line 3: | ||
''Financial accounting''. | ''Financial accounting''. | ||
Money the business owes the owner. This is equal to assets minus liabilities (including debt). In other words, the equity. | Money the business owes the owner. | ||
This is equal to assets minus liabilities (including debt). | |||
In other words, the equity. | |||
| Line 10: | Line 14: | ||
''Corporate finance''. | ''Corporate finance''. | ||
More broadly, the total amount of funding available for the operations of a firm. This would include both its debt and its equity. | More broadly in the corporate finance context, 'capital' is the total amount of funding available for the operations of a firm. | ||
This would include both its debt and its equity. | |||
| Line 17: | Line 23: | ||
''Company law''. | ''Company law''. | ||
More narrowly in | More narrowly in company law, 'capital' is the component of the total equity represented by the share capital of the company. | ||
4. | 4. | ||
''Regulation''. | |||
In the regulatory capital context, 'capital' means what the particular regulations say that it means. | |||
Here as elsewhere, care and consistency in definitions is essential. | |||
5. | |||
''Economics''. | ''Economics''. | ||
'Capital' is one of the 'factors of production' in economics, the others classically being labour, land and enterprise. | |||
In this context, 'capital' refers to the things that have been created to help in the production process, like machinery, factories and transport facilities. | In this context, 'capital' refers to the things that have been created to help in the production process, like machinery, factories and transport facilities. | ||
Revision as of 11:12, 9 January 2017
1.
Financial accounting.
Money the business owes the owner.
This is equal to assets minus liabilities (including debt).
In other words, the equity.
2.
Corporate finance.
More broadly in the corporate finance context, 'capital' is the total amount of funding available for the operations of a firm.
This would include both its debt and its equity.
3.
Company law.
More narrowly in company law, 'capital' is the component of the total equity represented by the share capital of the company.
4.
Regulation.
In the regulatory capital context, 'capital' means what the particular regulations say that it means.
Here as elsewhere, care and consistency in definitions is essential.
5.
Economics.
'Capital' is one of the 'factors of production' in economics, the others classically being labour, land and enterprise.
In this context, 'capital' refers to the things that have been created to help in the production process, like machinery, factories and transport facilities.
