Contributed Surplus

What is 'Contributed Surplus'

Contributed surplus is 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.

BREAKING DOWN 'Contributed Surplus'

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.

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RELATED FAQS
  1. 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 >>
  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. Why are economists interested in the consumer surplus?

    Understand why an economist would be interested in consumer surplus. Learn why an economy would want to maximize consumer ... Read Answer >>
  4. In a Corporation's financials, surplus earnings are accounted for as ...

    D is the correct answer. Surplus earnings are either plowed back into the company (retained earnings) or they are paid out ... Read Answer >>
  5. What's the difference between economic value added (EVA) and producer surplus?

    Understand economic value added and producer surplus. Learn why companies focus on economic value added and producers focus ... Read Answer >>
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