Capital Surplus

What is 'Capital Surplus'

Capital surplus is equity which cannot otherwise be classified as capital stock or retained earnings. It's usually created from a stock issued at a premium over par value.

BREAKING DOWN 'Capital Surplus'

Capital surplus is also known as share premium (UK), acquired surplus, donated surplus, paid-in surplus, or additional paid-in capital.

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RELATED FAQS
  1. What business risks ultimately caused Enron's collapse?

    Find out how a share premium account is taxed according to U.S. GAAP, which often refers to this account as additional paid-in ... Read Answer >>
  2. What is the difference between consumer surplus and economic surplus?

    Learn the difference between consumer surplus and economic surplus, how the concepts are related and the important theoretical ... Read Answer >>
  3. For what purpose is the consumer surplus figure used?

    Understand who uses the consumer surplus figure and why it's used. Learn why companies want to minimize consumer surplus ... Read Answer >>
  4. How does additional paid in capital affect retained earnings?

    Find out how additional paid-in capital can impact a company's retained earnings, including an explanation of both financial ... Read Answer >>
  5. Why can additional paid in capital never have a negative balance?

    Find out why the additional paid-in capital entry on a company's balance sheet can never be negative and how paid-in capital ... Read Answer >>
  6. Does the profit or loss of a company affect its paid in capital?

    Find out why the profits or losses of a business have no effect on its total paid-in capital, including how paid-in capital ... Read Answer >>
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