Paid In Capital


DEFINITION of 'Paid In Capital'

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares themselves. Paid in capital represents the funds raised by the business from equity, and not from ongoing operations.

Paid in capital is a company balance sheet entry listed under stockholder's equity, often shown alongside the balance sheet entry for additional paid-in capital. It may also be referred to as "contributed capital".


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BREAKING DOWN 'Paid In Capital'

Paid in capital can be compared to additional paid in capital, and the difference between the two values will equal the premium paid by investors over and above the par value of the shares. Preferred shares will sometimes have par values that are more than marginal, but most common shares today have par values of just a few pennies. Because of this, "additional paid in capital" tends to be representative of the total paid-in capital figure, and is sometimes shown by itself on the balance sheet.

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  1. Is a company's paid in capital affected by the trading of its shares in the secondary ...

    The amount of paid-in capital a company has is not affected by the trading of its shares on the secondary market. Paid-in ... Read Full Answer >>
  2. Does the profit or loss of a company affect its paid in capital?

    The profits or losses of a company do not affect its paid-in capital. Paid-in capital is generated solely by the sale of ... Read Full Answer >>
  3. What is the difference between par and no par value stock?

    The par value of a stock is the stated value per share as outlined in the issuing company's charter. Also called the face ... Read Full Answer >>
  4. What is fair capital?

    So-called "fair capital," like beauty, is in the eye of the beholder. In financial reporting, there are two kinds of capital: ... Read Full Answer >>
  5. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  6. Does working capital include prepaid expenses?

    The calculation for working capital includes any prepaid expenses that are due within one year, since such prepaid expenses ... Read Full Answer >>

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