1) Assets - liabilities = shareholders equity
Part used Engine = asset
Cash in bank = asset
(Eventually part used engine becomes unfit for purpose purely because of regulatory law, it is still an asset though as it has at least scrap value, but has to be replaced because CAA says so.)
Invoice for new/overhauled engine = liability
Liability 'removed' from balance sheet using cash (so also removing asset)
New/overhauled engine = asset
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Your shareholders equity is dependent on how many shares you own, and how shares are classed. Now, the trick is sell your shareholder's equity for more than (assets - liabilities), and the trick is to buy it for less than (assets - liabilities). That is where the free market value comes in, if you like it enough you will pay more than it is worth.
One drives a 4 year old Ford Mondeo Estate that gets >50mpg and cost me £3500 at auction. Thus proving that the car one owns has nothing whatsoever to do with one's business acumen
