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Debt VS Equity

Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › Debt VS Equity

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by Oluwatosin.
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  • Author
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  • August 5, 2018 at 10:32 am #466232
    iamaccastudent
    Participant
    • Topics: 3
    • Replies: 0
    • ☆

    Hello,

    Can someone help me out with these:

    Equity def: entity receiving/delivering a fixed number of its own equity instrument in exchange for a fixed amount of cash

    –> i would have thought the definition was meant for liabilities, as liabilities have fixed amount to be paid while equity don’t,
    can someone clarify the logic behind this please?
    Thanks a million!

    August 25, 2018 at 2:47 pm #469391
    Oluwatosin
    Member
    • Topics: 2
    • Replies: 4
    • ☆

    Equity is an obligation to give or receive a fixed number of shares of an entity while liability is an obligation to pay cash.

    Major difference “shares” and ‘cash’

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