Definition of Paid-in capital:
Capital contributed by the stockholders (shareholders) as distinct from the capital reserves generated by the firm as profits (earnings).
Paid-in capital is the amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares themselves plus amounts in excess of par value. Paid-in capital represents the funds raised by the business through selling its equity and not from ongoing business operations.
Paid-in capital also refers to a line item on the company's balance sheet listed under stockholders' equity, often shown alongside the line item for additional paid-in capital.
How to use Paid-in capital in a sentence?
- Paid-in capital is reported in the shareholder’s equity section of the balance sheet.
- It is usually split into two different line items: common stock (par value) and additional paid-in capital.
- Additional paid-in capital refers to only the amount in excess of a stock's par value.
- Paid-in capital is the full amount of cash or other assets that shareholders have given a company in exchange for stock, par value plus any amount paid in excess.
Meaning of Paid-in capital & Paid-in capital Definition