Paid In Capital

AAA

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".


INVESTOPEDIA EXPLAINS '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.


RELATED TERMS
  1. Par Value

    The face value of a bond. Par value for a share refers to the ...
  2. Equity Financing

    The act of raising money for company activities by selling common ...
  3. Preferred Stock

    A class of ownership in a corporation that has a higher claim ...
  4. Stockholders' Equity

    The portion of the balance sheet that represents the capital ...
  5. Share Capital

    Funds raised by issuing shares in return for cash or other considerations. ...
  6. Contributed Surplus

    The amount of money that a company earns from sources other than ...
Related Articles
  1. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

  2. Stock Basics Tutorial
    Investing Basics

    Stock Basics Tutorial

  3. Evaluating A Company's Capital Structure
    Bonds & Fixed Income

    Evaluating A Company's Capital Structure

  4. What is fair capital?
    Investing

    What is fair capital?

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center