Net Equity refers to owners' resources invested in the undertaking. Owners' initial investment is, in accounting terms, called Capital.
Net Equity is added not only to Capital increases but also, more commonly, to gains resulting from capital invested. Such gain is called Profit. Profit, which results from Entity's operations, belongs to owners who invested in the company (return on capital invested).
From the profit earned, in a specific period, a portion is normally distributed to owners of capital and the other part is reinvested in the business, i.e., is withheld (accrued) in the company. The portion of profit accrued (withheld) is added to Net Equity.
In a way, Net Equity is also a liability of the company towards its owners. However, it is normally a not-demanded liability, i.e., owners do not demand the company to reimburse their investment because they have an interest in its continuation.
Some companies do not distinguish between Liabilities and Net Equity, grouping them in a single group called Liabilities.
