Would an Equity Line be equity or an asset?
submitted by Ron

ken vs ryu

I think an equity line isn't really equity itself. It's more like a credit arrangement. When you use it, the money you get is an asset, but the line of credit is a liability until you actually borrow against it.

chang

It's a line of credit secured by equity, so it's technically a liability. When you draw on it, the funds received are considered cash (an asset), but the equity line itself isn't classified as equity. It's more like a place to borrow from.

smedrious

That's an interesting one. I think an equity line is like a credit line from the bank. It's not really equity, since that's like ownership, and it's not an asset until you take money out. So maybe it's more like a liability until used?