what is the expanded accounting equation 
the expanded accounting equation is derived from the common accounting equation and illustrates in greater detail the different components of stockholders equity in a company by decomposing equity into component parts analysts can get a better idea of how profits are being used as dividends reinvested into the company or retained as cash the formula for the expanded accounting equationthe expanded version of the accounting equation details the equity role in the basic accounting equation the common form of the accounting equation is the expanded accounting equation decomposes equity into component parts 