Contributed Capital

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DEFINITION

An entry on the shareholders' equity section of a company's balance sheet that summarizes the total value of stock that shareholders have directly purchased from the issuing company.

Contributed capital is calculated by adding the par value of the shares to the value paid that was greater than par value.



INVESTOPEDIA EXPLAINS

Shares that investors purchased from the secondary markets are not incorporated into the contributed capital. However, shares sold as a result of a secondary offering would count, as the proceeds of these shares go directly to the issuing company.


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