Additional paid-in capital

Additional paid-in capital,

Definition of Additional paid-in capital:

  1. [Important: Additional paid-in-capital is recorded at the initial public offering (IPO) only; the transactions that occur after the IPO do not increase the additional paid-in capital account.].

  2. Money that is contributed to a company by investors that is over and above the amount of the par value of the companys capital stock. Can also be referred to as either paid-in capital or contributed capital.

  3. Additional paid-in capital (APIC), is an accounting term referring to money an investor pays above and beyond the par value price of a stock. Often referred to as "contributed capital in excess of par”, APIC occurs when an investor buys newly-issued shares, directly from a company, during its initial public offering (IPO) stage. Therefore, APICs, which are itemized under the “shareholder’s equity” section of a balance sheet, are viewed as profit opportunities for companies, who receive excess cash from stockholders.

Meaning of Additional paid-in capital & Additional paid-in capital Definition