Contributed Surplus

A A A

DEFINITION

The amount of money that a company earns from sources other than its profits, such as when a company issues and sells shares at a price greater than their par value. The contributed surplus figure helps both investors and the company to distinguish between non-operational and operational income. It is found within the balance sheet.

INVESTOPEDIA EXPLAINS

If this value was combined with operational earnings, investors would have a hard time forecasting relatively accurate future earnings because earnings from contributed surplus are not a part of ongoing business operations.


RELATED TERMS
  1. Par Value

    The face value of a bond. Par value for a share refers to the stock value stated ...
  2. Operating Expense

    A category of expenditure that a business incurs as a result of performing its ...
  3. Stock

    A type of security that signifies ownership in a corporation and represents ...
  4. Shareholders' Equity

    A firm's total assets minus its total liabilities. Equivalently, it is share ...
  5. Operating Earnings

    Profit earned after subtracting from revenues those expenses that are directly ...
  6. Return On New Invested Capital ...

    A calculation used, either by a firm or investors, to determine the amount of ...
  7. Additional Paid In Capital

    A value that is often included in the contributed surplus account in the shareholders' ...
  8. Earnings

    The amount of profit that a company produces during a specific period, which ...
  9. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities and shareholders' ...
  10. Working Capital

    This ratio indicates whether a company has enough short term assets to cover ...
Related Articles
  1. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

  2. What are the sources of funding available ...
    Investing

    What are the sources of funding available ...

  3. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  4. Top 8 Ways Companies Cook The Books
    Personal Finance

    Top 8 Ways Companies Cook The Books

  5. How Return On Equity Can Help You Find ...
    Economics

    How Return On Equity Can Help You Find ...

  6. 4 Leverage Ratios Used In Evaluating ...
    Fundamental Analysis

    4 Leverage Ratios Used In Evaluating ...

  7. How Does Goodwill Affect Stock Prices?
    Investing Basics

    How Does Goodwill Affect Stock Prices?

  8. Why is it sometimes better to use an ...
    Investing Basics

    Why is it sometimes better to use an ...

  9. How do you calculate working capital?
    Investing Basics

    How do you calculate working capital?

  10. How do changes in working capital affect ...
    Investing Basics

    How do changes in working capital affect ...

comments powered by Disqus
Hot Definitions
  1. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  2. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  3. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  4. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  5. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  6. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
Trading Center