A subcategory of equity capital that can be distributed to equity holders (shareholders) without restrictions (such as any restrictions that may arise from the claims of others in an entity’s net assets). Unrestricted equity doesn’t include share capital. It rather consists of reserves (other than the fair value reserve and revaluation reserve), invested unrestricted equity, as well as the profits of the current financial period and retained earnings relating to previous financial periods.

An entity, at its discretion, can distribute unrestricted equity to its shareholders.