U.S. GAAP and SEC Form 20-F utilize both stockholders' and, less frequently, shareholders' and owners' equity. SEC Regulation S-X uses stockholders' equity and occasionally shareholders' equity. Subtopic 480-10 (FASB Statement No. 150) clarifies that several names for equity of business enterprises, such as stockholders' equity or owners' equity, are commonly used interchangeably under U.S. GAAP.1 The term shareholders' equity prevails under IFRSs.
Comment: Some terminology differences come from the use of British English versus American English. Nevertheless, the terms appear synonymous under IFRSs and U.S. rules.
The term net assets can be found in both U.S. GAAP and IFRSs. Under the FASB's Concepts, the term net assets refers to assets minus liabilities,2 although it is undefined under IFRSs.
Designating equity as net assets is more than a semantic distinction. Firstly, net assets identify equity as a residual concept (see Section 18.104.22.168 previously). The Discussion Paper of the Common Conceptual Project highlights that presenting equity as a separate section (as opposed to a separate category within the financing section) shows that equity equals net assets.3
Secondly, the term net assets is normally considered a substitute for equity.4 However, the IASB Framework specifies that such an ...